Iron-polysaccharide complexes have been extensively used for the treatment of iron-deficiency anemia without side-effects. In this study, insulin-loaded microcapsules were prepared via layer-by-layer deposition of oppositely charged Fe(3+) and dextran sulfate (DS) onto the surface of insulin microparticles. Fe(3+) was combined with DS via both electrostatic interaction and chemical complexation process, leading to the formation of a stable complex of Fe(3+)/DS. Subsequently, protamine was used as the outermost layer of the insulin-loaded microcapsules to facilitate nuclear delivery. The sufficient charge reversal with successive deposition cycles and successful fabrication of hollow microcapsules provided strong evidence for the growth of (Fe(3+)/DS)(n) multilayer on the surface of microparticles. The experiments showed that the microcapsules successfully entrapped insulin with encapsulation efficiency of 70.56+/-0.97% and drug loading content of 46.15+/-0.97%. It was found that the release time and hypoglycemic effect increased as the number of deposited bilayers increased. The insulin-loaded microcapsules significantly improved glucose tolerance from 2 h (free insulin) to even 12 h (insulin-loaded microcapsules with 10 bilayers). Moreover, the microcapsules with protamine as the outermost layer displayed a prolonged and stable glucose-lowering profile over a period of over 6 h compared with Fe(3+) as the outermost layer. These findings indicate that such microcapsules can be a promising approach for the construction of an effective controlled release delivery system of insulin as well as other proteins with short half-life time.