Abstract Background The purpose of this study was to develop protein-/peptide-loaded nanoparticle-based delivery system, which can efficiently deliver therapeutic molecules to the lung via pulmonary delivery. The chitosan nanoparticles were prepared by the ionic gelation method, and bovine serum albumin was used as a model protein. These nanoparticles were characterized for size, zeta potential, encapsulation efficiency, cell cytotoxicity, uptake study, release profile and size distribution and uniformity. The chemical interaction of chitosan and protein was studied by XRD and FTIR. The integrity assessment of encapsulated protein into nanoparticle was studied by native and SDS-PAGE gel electrophoresis. Results The size and zeta potential of BSA nanoparticles were 193.53 ± 44.97 to 336.36 ± 94.63 and 12.73 ± 0.41 to 18.33 ± 0.96, respectively, with PDI values of 0.35–0.45. The encapsulation efficiency was in the range of 80.73 ± 6.37% to 92.34 ± 1.72%. The cumulative release of the BSA from the nanoparticles was 72.56 ± 6.67% in 2 weeks. The BSA-loaded nanoparticles showed good uptake and no significant cytotoxicity observed into the A549 cell line. In this study, it was also observed that during nanoparticles’ synthesis protein structure and integrity is not compromised. The nanoparticles showed controlled and sustained release with initial burst release. In TEM images, it was shown that nanoparticles’ distribution is uniform within nanometre range. Conclusion From this study, it was concluded that nanoparticles prepared by this method are suitable to deliver protein/peptide into the cells without any degradation of protein during process of nanoparticle fabrication.