The protein pharmaceutical market is rapidly growing, since it is gaining support from the recombinant DNA technology. To deliver these drugs via the oral route, the most preferred route, is the toughest challenge. In the design of oral delivery of peptide or protein drugs, pH sensitive hydrogels like alginate and chitosan have attracted increasing attention, since most of the synthetic polymers are immunogenic and the incorporation of proteins in to these polymers require harsh environment which may denature and inactivate the desired protein. Alginate is a water-soluble linear polysaccharide composed of alternating blocks of 1-4 linked alpha-L-guluronic and beta-D-mannuronic acid residues where as chitosan is a co polymer of D-glucosamine and N-acetyl glucosamine. The incorporation of protein into these two matrices can be done under relatively mild environment and hence the chances of protein denaturation are minimal. The limitations of these polymers, like drug leaching during preparation can be overcome by different techniques which increase their encapsulation efficiency. Alginate, being an anionic polymer with carboxyl end groups, is a good mucoadhesive agent. The pore size of alginate gel microbeads has been shown to be between 5 and 200 nm and coated beads and microspheres are found to be better oral delivery vehicles. Cross-linked alginate has more capacity to retain the entrapped drugs and mixing of alginate with other polymers such as neutral gums, pectin, chitosan, and eudragit have been found to solve the problem of drug leaching. Chitosan has only limited ability for controlling the release of encapsulated compound due to its hydrophilic nature and easy solubility in acidic medium. By simple covalent modifications of the polymer, its physicochemical properties can be changed and can be made suitable for the peroral drug delivery purpose. Ionic interactions between positively charged amino groups in chitosan and the negatively charged mucus gel layer make it mucoadhesive. The favourable properties like biocompatibility, biodegradability, pH sensitiveness, mucoadhesiveness, etc. has enabled these polymers to become the choice of the pharmacologists as oral delivery matrices for proteins.