Peptides and proteins represent an expanding and important group of biopharmaceuticals. The administration of these drugs, however, is difficult, primarily because of their large size and susceptibility to enzymatic degradation. A promising avenue for their delivery to the body is through the skin, or transdermally. However, the skin is an excellent barrier to large, hydrophilic compounds such as peptides and proteins. A new delivery device is proposed, consisting of metallic shunts which penetrate the outer layer of the skin and reside in the more aqueous lower skin strata, but not so deep as to reach the blood vessels. The drug reservoir of this device is a novel composite of drug-saturated hydrogel and drugcontaining biocompatible elastomer microbeads. This study examined the fabrication and release behaviour of the novel microbead embedded hydrogel drug reservoir system. It was determined that the microbead embedded hydrogel device delivers more protein over a longer time frame per unit volume than from a device consisting solely of the hydrogel. The microbead embedded hydrogel system is also capable of a bimodal release pattern, the first phase of which is diffusionally controlled while the last is governed by the rate at which the drug is released by osmotic pressure induced rupturing of the microbead polymer. The protein release kinetics were well described by models developed to explain protein diffusion within stiff-chained hydrogels and protein release by osmotic pressure from elastomeric microbeads.