© 2020 Informa UK Limited, trading as Taylor & Francis Group.Oral delivery of peptide and proteins is challenging due to their poor physical and chemical stability which usually results in inadequate therapeutic efficacy. Nanoparticles encapsulating insulin was developed by the ionic gelation technique using sulfobutyl ether-β-cyclodextrin as an anionic linker. Phospholipid hybrid nanoparticles were formulated by utilizing ionic gelation and thin-film hydration methods using D-α-Tocopheryl polyethylene glycol 1000 succinate, sodium deoxycholate separately and in combination to take the advantage of liposomes and nanoparticles also various absorption enhancement mechanisms. All formulations were characterized and tested for in vitro gastrointestinal stability, in vitro drug release, and cytotoxicity. On the other hand, in vivo effects of developed formulations on reducing blood glucose levels were monitored for 8 hours. Phospholipid hybrid nanoparticles including D-α-Tocopheryl polyethylene glycol 1000 succinate and sodium deoxycholate in combination with 548.7 nm particle size, 0.332 polydispersity index, 22.0 mV zeta potential, and 61.9% encapsulation efficiency, exhibited desired gastrointestinal stability and insulin release in vitro. In addition, the formulation proved its safety with cytotoxicity studies on L929 cells. The subjected phospholipid hybrid nanoparticle formulation was found to be the most effective formulation by reducing and maintaining blood glucose levels with avoiding fluctuations.