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In the present study thiolated Eudragit L100 (Eul) based polymeric nanoparticles (NPs) were employed to develop an oral insulin delivery system. Sulfydryl modification was achieved by grafting cysteine to the carboxylic acid group of Eudragit L100, which displayed maximum conjugate level of 390.3 ± 13.4 μmol thiol groups per gram. Eudragit L100-cysteine (Eul-cys) and Eul nanoparticles were prepared by the precipitation method, in which reversible swelling of pH-sensitive material was used for insulin loading and release. Nanoparticles were characterized in terms of their particle size, morphology, loading efficiency (LE%) and in vitro insulin release behavior. The NPs had an average size of 324.2 ± 39.0 nm and 308.8 ± 35.7 nm, maximal LE% of 92.2 ± 1.7% and 96.4 ± 0.5% for Eul-cys and Eul, respectively. The release profile of NPs in vitro showed pH-dependent behavior. Circular dichroism (CD) spectroscopy analysis proved that the secondary structure of the insulin released from NPs was unchanged compared with native insulin. The mucoadhesion study in vitro showed that Eul-cys NPs produced a 3-fold and 2.8-fold increase in rat jejunum and ileum compared with unmodified polymer NPs, respectively, which was due to the immobilization of thiol groups on Eudragit L100. Oral administration of insulin-loaded Eul-cys NPs produced a higher and prolonged hypoglycemic action, and the corresponding relative bioavailability of insulin was found to be 7.33 ± 0.33%, an increase of 2.8-fold compared with Eul NPs (2.65 ± 0.63%). This delivery system is a promising novel tool to improve the absorption of protein and peptide drugs in the intestinal tract.