Injectable In situ gel-forming chitosan/β-glycerol phosphate (CS/β-Gp) solution can be introduced into the body in a minimally invasive manner prior to solidifying within the target tissue. This hydrogel is a good candidate for achieving a prolonged drug delivery system for insulin considering its high molecular weight. In addition to the physicochemical characterization of this hydrogel, in vitro and in vivo applications were studied as a sustained insulin delivery system. In the in vitro release studies, 19–63% of total insulin was released from the CS/β-Gp hydrogel within 150 h at different β-Gp and insulin concentrations. The best formulation was selected for in vivo experimentation to control the plasma glucose of diabetic mice models. The hypoglycemic effect of this formulation following subcutaneous injection in diabetic mice lasted 5 d, significantly longer than that of free insulin solution which lasted several hours.