With the rise in diabetes mellitus cases worldwide and lack of patient adherence to glycemia management using injectable insulin, there is an urgent need for the development of efficient oral insulin formulations. However, the gastrointestinal tract presents a formidable barrier to oral delivery of biologics. Here we report the development of a highly effective oral insulin formulation using choline and geranate (CAGE) ionic liquid. CAGE significantly enhanced paracellular transport of insulin, while protecting it from enzymatic degradation and by interacting with the mucus layer resulting in its thinning. In vivo, insulin-CAGE demonstrated exceptional pharmacokinetic and pharmacodynamic outcome after jejunal administration in rats. Low insulin doses (3–10 U/kg) brought about a significant decrease in blood glucose levels, which were sustained for longer periods (up to 12 hours), unlike s.c. injected insulin. When 10 U/kg insulin-CAGE was orally delivered in enterically coated capsules using an oral gavage, a sustained decrease in blood glucose of up to 45% was observed. The formulation exhibited high biocompatibility and was stable for 2 months at room temperature and for at least 4 months under refrigeration. Taken together, the results indicate that CAGE is a promising oral delivery vehicle and should be further explored for oral delivery of insulin and other biologics that are currently marketed as injectables.