The present study was carried out to evaluate potentials of alkyl polyglucoside (APG) as an alternative surfactant/stabilizer in the preparation of peptide-loaded nanoparticles. hGF2 (human gel filtration fraction 2) was used as a model peptide and APG based on C10 fatty alcohol (decyl polylglucoside) was used as a representative surfactant. PLA (poly D,L-lactide) and PLGA (poly D,L-lactide-co-glycolide) based nanoparticles were prepared and the effect of APG on particle size, entrapment efficiency and biological activity was evaluated. At a concentration as low as 0.05% w/v, APG provided an excellent stabilization effect, resulting in nanoparticles with better encapsulation efficiency and particle size well below 450 nm. The effective concentration of APG was found to be much less (10-fold) as compared to PVA. Moreover, APG also showed low residual content as compared to PVA. In-vitro and in-vivo biological activity evaluation confirmed that encapsulated peptide was compatible with APG. These preliminary results suggest that APGs can be used as alternate surfactants for nanoparticle preparation.