Trimethyl chitosan-cysteine conjugate (TMC-Cys) was synthesized in an attempt to combine the mucoadhesion and the permeation enhancing effects of TMC and thiolated polymers related to different mechanisms for oral absorption. TMC-Cys with various molecular weights (30, 200, and 500 kDa) and quaternization degrees (15 and 30%) was allowed to form polyelectrolyte nanoparticles with insulin through self-assembly, which demonstrated particle size of 100–200 nm, zeta potential of +12 to +18 mV, and high encapsulation efficiency. TMC-Cys/insulin nanoparticles (TMC-Cys NP) showed a 2.1–4.7-fold increase in mucoadhesion compared to TMC/insulin nanoparticles (TMC NP), which might be partly attributed to disulfide formation between TMC-Cys and mucin as evidenced by DSC measurement. Compared to insulin solution and TMC NP, TMC-Cys NP induced increased insulin transport through rat intestine by 3.3–11.7 and 1.7–2.6 folds, promoted Caco-2 cell internalization by 7.5–12.7 and 1.7–3.0 folds, and augmented uptake in Peyer's patches by 14.7–20.9 and 1.7–5.0 folds, respectively. Such results were further confirmed by in vivo experiment with the optimal TMC-Cys NP. Biocompatibility assessment revealed lack of toxicity of TMC-Cys NP. Therefore, self-assembled nanoparticles between TMC-Cys and protein drugs could be an effective and safe oral delivery system.