Controlled release systems for growth factors and morphogens are potentially powerful tools for the engineering or the treatment of living tissues. However, due to possible instabilities of the protein during manufacture, storage, and release, in the development of new release systems it is paramount to investigate into the maintenance of bioactivity of the protein. Within this study, recently developed protein releasing lipid matrix cylinders of 2 mm diameter and 2 mm height made from glycerol tripalmitate were manufactured in a compression process without further additives. Insulin in different concentrations (0.2%, 1%, and 2%) served as model protein. The bioactivity of the protein released from the matrices was investigated in a long-term cartilage engineering culture for up to four weeks; additionally, the release profiles were determined using ELISA. Insulin released from the matrices increased the wet weights of the cartilaginous cell-polymer constructs (up to 3.2-fold), the amount of GAG and collagen in the constructs (up to 2.4-fold and 3.2-fold, respectively) and the GAG and collagen content per cell (1.8-fold and 2.5-fold, respectively), compared to the control. The dose-dependent effects on tissue development correlated well with release profiles from the matrices with different insulin loading. In conclusion, the lipid matrices, preserving the bioactivity of incorporated and released protein, are suggested as a suitable carrier system for use in tissue engineering or for the localized treatment of tissues with highly potent protein drugs such as used in the therapy of brain cancer or neurodegenerative CNS diseases.