In the past, oral insulin has been developed to reduce the suffering of diabetic patients. However, the physiological barriers in gastrointestinal (GI) tract are the major challenges in oral delivery of insulin. In this study, a novel oral delivery system of insulin called NiM (NPs in MPs) has been developed to overcome the GI barriers, which based on a three‐dimensional system of biocompatible chitosan/alginate/casein. Alginate/chitosan nanoparticles (AC‐NPs) were firstly prepared by ionic pre‐gel method and complexation with polyelectrolytes. Then, they were subsequently coated with casein as a protective agent to form NiM, which could keep stability and physiological activity of insulin in gastric tract. The characterization of NiM showed stable hydrodynamic parameters, and the entrapment efficiency of insulin reached 51.1%. In vitro, only 13.5% of insulin was released in the simulated gastric fluid for the first 2 h. But about 57.4% of insulin was slowly released in the simulated intestinal fluid for 10 h. These results indicated that the coating of casein could increase stability of insulin in gastric tract and control release of insulin in intestinal tract. Furthermore, NiM provided a sustained and significant reduction of the blood glucose levels of diabetic mice. Overall, the results demonstrated that our formed NiM may be a promising oral delivery system of insulin for diabetic patients.