A simple method was developed to prepare the microcapsules and microparticles as drug carriers. The drug-loaded microcapsules and microparticles were prepared by self-assembly of carboxymethyl chitosan (CMCTS) and carboxymethyl chitosan-graft-poly(N,N-diethylacrylamide) (CMCTS-g-PDEA) in aqueous media under mild conditions. The preparation method did not involve any organic solvent and surfactant, and it could offer good control over the morphology and the size of self-assemblies. Through adjusting the grafting percentage, nanosized drug-delivery systems with different shapes, that is, microcapsules and microparticles, could be obtained. The grafting reaction was confirmed by comparing the FTIR spectra of CMCTS and the grafted copolymer, and the morphologies of the drug-delivery systems were observed by dynamic light scattering and transmission electron micrograph. Preliminary characterization of the biocompatibility of these microgels was done by the cytotoxicity assays using the L02 human hepatic natural cell as probes. The in vitro bovine serum albumin (BSA) release behavior indicated that drug release rate and encapsulation efficiency depended upon pH value and nanoparticle structure. The release of BSA could be effectively sustained from both drug-loaded microgels, which passed the qualitative cytotoxicity test and have no apparent cytotoxicity for the CMCTS-g-PDEA microgel self-assembly. © 2011 Wiley Periodicals, Inc. J Biomed Mater Res Part B: Appl Biomater 100B: 305–313, 2012.