Biocompatible and pH-responsive poly(ethylene glycol) (PEG)-acrylic acid (AAc) hydrogels were prepared by new technique using gamma-irradiation for controlled oral drug delivery. The gel fraction was over 80% and the equal amounts of PEG and AAc blended hydrogel had efficient insulin loading using equilibrium swelling. These hydrogels exhibited unique pH-responsive characteristics in which interpolymer complexes were formed in acidic media and dissociated in neutral or basic environments. The insulin release from the gel was significantly retarded in acidic media while rapid release occurred under neutral/basic conditions. At the high pH solution, the gels swelled rapidly and over 70% of the insulin loaded was released over a period of 10 h. Within 2 h of administration of the insulin-containing gels, significant blood glucose reduction effects were observed in diabetic rats. The blood glucose reduction lasted for up to 10 h following administration.