Proteolytic degradation and release of microgel-bound peptides was investigated for trypsin, poly(acrylic acid-co-acrylamide) microgels (70-90 μm in diameter), and oppositely charged polylysine, using a method combination of confocal microscopy and micromanipulator-assisted light microscopy. Results show that trypsin-induced release of polylysine increased with increasing trypsin concentration, decreasing microgel charge density and decreasing peptide molecular weight. While the microgel offered good protection against enzymatic degradation at high microgel charge density, it was also observed that the cationic peptide enabled trypsin to bind throughout the peptide-loaded microgels, even when it did not bind to the peptide-void ones. With the exception of highly charged microgels, proteolytic degradation throughout the peptide-loaded microgel resulted in the generation of short and non-adsorbing peptide stretches, giving rise to the concentration and peptide length dependence observed. A simple random scission model was able to qualitatively capture these experimental findings. Collectively, the results demonstrate that microgel charge density, peptide molecular weight, and enzyme concentration greatly influence degradation/release of microgel-bound peptides and need to be considered in the use of microgels, e.g., as carriers for protein and peptide drugs.