A novel procedure for the preparation of hydrophilic peptide-containing oily formulations involving the freeze-drying of water-in-oil emulsions (FWE) is described. A mixture of an aqueous phase containing insulin and oil phase containing phosphatidylcholine was emulsified to prepare water-in-oil emulsions, which were subsequently lyophilized. Upon addition of oil, the lyophilates formed a clear oily solution which was considered as an anhydrous reverse micelle (ARM) system since it contained no water but 20-nm insulin nanoparticles, as revealed by dynamic light scattering. The 20-nm insulin nanoparticles, existing in a crystal form, were also contained in the lyophilates, as proved by scanning electron microscopy, small angle X-ray scattering and differential scanning calorimetry analysis. The drug release from the oily formulation of SPC/insulin (10:1) was slow and less than 12% of the total insulin was released after 24h. A significant reduction in the plasma glucose level of fasting diabetic rats after oral administration of insulin-containing ARMs confirmed the bioactivity of the drug and the potential usefulness of phospholipid-based oily formulations. Both the ARMs and lyophilates were stable and could be stored at 4°C for at least 6 months. Thus, this simple FWE procedure is suitable for the solubilization of hydrophilic peptides in oil to produce stable products for therapeutic applications.