Design and formulation of advanced drug delivery systems (DDS), such as nanoscale carriers, presents an attractive research area in the field of drug formulation. A vast contribution is expected in delivery of biopharmaceuticals as is clearly recognized that inadequate delivery is the single most important factor delaying their application in clinical practise. In spite of some successful guidelines, formulation of protein drugs in DDS requires step-by step strategy and methods differing from those used for classical pharmaceutical drugs since proteins are the most delicate ones in term of retaining their biological function. A model protein drug cystatin was selected in our work, having high potential for inactivating cysteine proteases, enzymes involved in processes of tumour invasion and metastasis. Nanoparticles was used as carrier system with the aim to increase the bioavailability of the protein drug by protecting it from premature degradation in biological environment and faciliting its intracellular delivery. Cystatin was incorporated in poly(lactide-co-glycolide) (PLGA) nanoparticles by the water-in-oil-in-water emulsion solvent diffusion method. To preserve its biological activity an optimized technique was developed, adjusting physical and chemical parameters of processes during nanoparticle production. Cystatin-loaded NPs had size of 300-350 nm diameter, and contained 1.6 % (w/w) of cystatin, retaining 85% of its starting activity. To follow cellular uptake of nanoparticles, cystatin was labelled with fluorescent dye (Alexa Fluor 488) prior to its encapsulation into NPs. Image analysis showed rapid internalization of NPs into MCF-10A neoT cells as the fluorescence spots were detected after treatment with NPs. On the other hand, labelled free cystatin was internalised very slowly, suggesting that NPs facilitate the delivery of its cargo into the cells. Cystatin, delivered by NPs, also exerted its inhibitory activity on intracellular target cathepsin B, suggesting that its integrity was preserved throughout the processes of formulation and delivery. On the other hand, free cystatin did not impart proteolityic activity of cathepsin B, when tested under the same conditions using the substate, specific for intracellular cathepsin B. Our results show that protein drug can be formulated in the active form into PLGA NPs, when suitably selecting the process parameters of NP-production. NPs are also able to facilitate delivery of protein drug into the cells, enabling its activity on the intracellular target