A mild chitosan/calcium alginate microencapsulation process, as applied to encapsulation of biological macromolecules such as albumin and insulin, was investigated. The microcapsules were derived by adding dropwise a protein-containing sodium alginate mixture into a chitosan-CaCl2 system. The beads containing a high concentration of entrapped bovine serum albumin (BSA) as more than 70% of the initial concentration were achieved via varying chitosan coat. It was observed that approximately 70% of the content is being released into Tris-HCl buffer, pH 7.4 within 24 h and no significant release of BSA was observed during treatment with 0.1M HCl pH 1.2 for 4 h. But the acid-treated beads had released almost all the entrapped protein into Tris-HCl pH 7.4 media within 24 h. Instead of BSA, the insulin preload was found to be very low in the chitosan/calcium alginate system; the release characteristics were similar to that of BSA. From scanning electron microscopic studies, it appears that the chitosan modifies the alginate microspheres and subsequently the protein loading. The results indicate the possibility of modifying the formulation in order to obtain the desired controlled release of bioactive peptides (insulin), for a convenient gastrointestinal tract delivery system.