For many diabetics, daily, lifelong insulin injections are required to effectively manage blood glucose levels and the complications associated with the disease. This can be a burden and reduces patient quality of life. Our goal was to develop a more convenient oral delivery system that may be suitable for insulin and other peptides. Insulin was entrapped in 1.5-mm beads made from denatured whey protein isolate (dWPI) using gelation. Beads were then air-dried with fumed silica, Aerosil®. The encapsulation efficiency was ~61% and the insulin loading was ~25 µg/mg. Dissolution in simulated gastric-, and simulated intestinal fluids (SGF, SIF) showed that ~50% of the insulin was released from beads in SGF, followed by an additional ~10% release in SIF. The omission of Aerosil® allowed greater insulin release, suggesting that it formed a barrier on the bead surface. Circular dichroism analysis of bead-released insulin revealed an unaltered secondary structure, and insulin bioactivity was retained in HepG2 cells transfected to assess activation of the endogenous insulin receptors. Insulin-entrapped beads were found to provide partial protection against pancreatin for at least 60 min. A prototype bead construct was then synthesised using an encapsulator system and tested in vivo using a rat intestinal instillation bioassay. It was found that 50 IU/kg of entrapped insulin reduced plasma glucose levels by 55% in 60 min, similar to that induced by subcutaneously (s.c.)-administered insulin (1 IU/kg). The instilled insulin-entrapped beads produced a relative bioavailability of 2.2%. In conclusion, when optimised, dWPI-based beads may have potential as an oral peptide delivery system.