The development of efficient and bio-safe polymeric carriers for oral insulin delivery is a major thrust in biomedical research. In this paper, dendronized chitosan (DCTS) is prepared using a Michael-type addition reaction by grafting polyamidoamine (PAMAM) onto chitosan to improve its water solubility, pH sensitivity, and insulin encapsulation efficiency for enhanced bioavailability of the oral insulin. The self-assembled dendronized chitosan nanoparticles are prepared using a mild coacervation method, in which almost sub-spherically shaped nanoparticles of 85–150 nm size are produced, with an insulin encapsulation of approx. 95%. In vitro release study confirms a pH-sensitive and self-sustained release of insulin, where the oral administration of these nanoparticles exhibits a pronounced hypoglycemic effect in diabetic mice, producing a relative bioavailability of ∼9.19%. As no systemic toxicity is observed with its peroral delivery, these DCTS nanoparticles can effectively serve as a promising device in the efficient administration of oral insulin.