In the present investigation, alginate nanoparticles have been prepared and characterised by various techniques such as FTIR, SEM, particle size analysis and surface charge measurements. It was found from both the SEM and particle size analysis that average size of the particle was about 40 nm. The particles were loaded with insulin and the release kinetics of insulin was studied in PBS medium. The results indicated that when percent loading increases from 11.7 to 38.9, the released amount of insulin increased from 18% to 60% of the loaded drug. The effect of composition of nanoparticles, pH and temperature of the release medium was examined on the amount of released insulin. It was observed when that amount of alginate in the feed mixture was varied from 1.0 to 2.0 g, the prepared nanoparticles showed a decreasing tendency to release insulin. Similarly, upon increasing the concentration of crosslinker in the range 0.5-1.1 mM, the release of insulin constantly decreased. The chemical stability of the loaded drug was assessed especially under highly acidic conditions of artificial gastric juice and it was noticed that even in harsh acidic environment (pH 1.2) the insulin remains chemically stable. The in vitro blood compatibility of nanoparticles was also investigated and it was found that for a definite composition of nanoparticles, protein adsorption and percent haemolysis were minimum which suggested for an optimum blood compatibility of alginate nanoparticles of definite composition. Thus, it can be conclusively stated that the calcium alginate nanoparticles prepared by emulsion crosslinking method show potential to be developed as oral formulation for insulin delivery.