In this present study aimed to formulate and evaluate metformin loaded chitosan (CSM) nanoparticles (NPs) with sustained action for NIDDM (Non-Insulin Dependent Diabetes Mellitus), These nanoparticles have been developed by ionic gelation technique and were subjected to various studies including PCS (Photon correlation spectroscopy), SEM (scanning electron microscopy) and surface charge analysis. The in vitro haemolysis assay, SDS-PAGE test of stability and glucose uptake studies were performed with nanoparticles. The particle size of the nano-formulations 541.2 nm and exert spherical morphology with high stability. Moreover, formulated nanoparticles point up that, there was no interaction between drug and polymer. The CSM4 formulation showed better in vitro prolonged release characteristics. In addition, the CSM nanoparticles were reasonably stable in the presence of excess bovine serum albumin. The percentage of hemolysis induced by metformin and placebo CSNPs were less than 5% and CSMNPs are highly hemocompatible. The glucose uptake significantly augmented in skeletal muscle cell line. Above results recommended nanoparticle had prolonged release, reduced dose frequency, better patient compliance and targeted action on skeletal muscles.