In this study, we fabricated Temprature-sensitive polyethyleneglycol/N-isopropylacrylamide (PEG/NIPAAm) hydrogels by a free-radical polymerisation method with variation in the content of monomer, polymer and cross-linking agent. Swelling was performed in USP phosphate buffer solutions of pH 7.4 for selected samples. It was observed that swelling and drug release from hydrogels can be modified by changing composition and degree of cross-linking of the hydrogels under investigation. As expected LCST increased from 34 to 39C as PEG content in copolymers increased from 2 to 8% (w/w). The presence of polyethyleneglycol in the hydrogel formulation resulted the higher mechanical strength and swelling. Network structure was evaluated by different parameters and FTIR confirmed the formation of cross-linked hydrogels. The percent swelling, equilibrium swelling, diffusion constant values are evaluated for PEG/NIPAAm hydrogels at 1% of Insulin solution at room temperature. Drug release increased by increasing PEG contents in hydrogels while increasing the concentration of cross-linking agent had the opposite effect. Based on the release kinetic of the Insulin drug, the hydrogels displayed a non-Fickian diffusion mechanism. According the diffusion kinetic data in hydrogels became clear that diffusion kinetic data were best described by Higuchi model. Permeation from PEG/NIPAAm hydrogels followed a Super Case II transport mechanism, most likely driven by macro molecular chain relaxation and swelling of hydrophilic polymers.