The purpose of this work was to evaluate the influence of the co-encapsulation of lyoprotectants with insulin into PLGA nanoparticles, on the stability of the protein and nanoparticles upon lyophilization. Different lyoprotectants were used, namely trehalose, glucose, sucrose, fructose and sorbitol at 10% (w/v). Insulin-loaded PLGA nanoparticles with co-encapsulated lyoprotectants achieved a mean particle size of 386–466 nm, and a zeta potential ranging between −34 and −38 mV, dependent on the lyoprotectant used. Formulations had association efficiencies and loading capacities of 85–91% and 10–12%, respectively. The lyophilization process increased the colloidal stability of nanoparticles, and maintained their spherical shape and smooth surface, particularly in presence of lyoprotectants. XRPD revealed that the lyophilizates of nanoparticles with co-encapsulated lyoprotectants were amorphous, whereas formulations with externally added lyoprotectants, except trehalose, showed crystallinity. FTIR assessment showed that co-encapsulating lyoprotectants better preserved insulin structure upon lyophilization with a spectral area overlap of 82–87%, compared to only 72% in lyoprotectant absence. These results were confirmed by circular dichroism spectroscopy. Surprisingly, the simultaneous co-encapsulation and addition of lyoprotectants was detrimental to protein stabilization. The insulin in vitro release studies demonstrated that formulations with co-encapsulated trehalose, glucose, sucrose, fructose and sorbitol achieved 83%, 69%, 70%, 77% and 74%, respectively after 48 h. In contrast, formulations added with those lyoprotectants prior lyophilization showed a lower release rate not higher than 60% after 48 h. This work gives rise to a different promising strategy of co-encapsulating lyoprotectants and therapeutic proteins, to better stabilize protein structure upon lyophilization.