The objective of this study was to elucidate the mechanisms contributing to oral bioavailability of insulin by poly(methacrylic acid grafted with poly(ethylene glycol)) (P(MAA-g-EG)) hydrogels using the gastric and intestinal fluids from rats. P(MAA-g-EG) hydrogels successfully protected the incorporated insulin from enzymatic degradation by forming interpolymer complexes in the gastric fluid. The hydrogels also showed the insulin protection ability by itself. In the intestinal fluid, P(MAA-g-EG) hydrogels significantly decreased the insulin degradation rate and calcium ion levels, while protein levels was not changed. Insulin protecting effects were dependent on the fraction of the carboxylic group in the polymer networks. Moreover, the insulin degradation inhibitory effect was significantly correlated with Ca2+ deprivation ability of P(MAA-g-EG) hydrogels in the intestinal fluid, implying that the Ca2+ deprivation ability plays an important role in the inhibition of the intestinal enzyme activities. Insulin-loaded P(MAA-g-EG) (ILPs) hydrogels showed a rapid and almost complete insulin release even in the presence of intestinal proteases. These results suggested that the insulin protection ability of the hydrogels contributed to improve oral insulin absorption and that P(MAA-g-EG) hydrogels can be an excellent carrier for protecting insulin during their transit through the GI tract.