A novel protein delivery system with incorporating PLGA microspheres into porous PNIPAAm hydrogel for sustained delivery of proteins was successfully developed. Distribution of PLGA microspheres in the hydrogel was determined by SEM, and the in vitro protein release characteristics of combination system were investigated by UV-vis spectroscopy. The SEM results showed that PLGA microspheres were encased into the interconnected porous structure of PNIPAAm hydrogel. In vitro release of BSA from combination system exhibited a less burst release followed by a slower sustained release for 20 days. The slow release after the initial burst release was due to the low permeability of BSA in PLGA microspheres. The controlled release of BSA encapsulated within microspheres embedded in scaffolds was better controlled when compared to delivery from PNIPAAm hydrogels alone. The combination systems showed great promise for application in protein delivery.