Oral delivery of insulin to diabetic patients is highly desirable because it would be non-invasive and more closely mimic normal physiology, but this route of administration typically results in low bioavailability due to low pH and enzymatic degradation along the gastrointestinal tract. To explore an alternative approach that may mitigate these obstacles and also facilitate local synthesis of new therapeutic protein molecules in the small intestine, we engineered the food-grade bacterium Lactococcus lactis (NZ9000) for nisin-inducible expression and secretion of a bioactive single-chain insulin (SCI) analog, SCI-57. We show that the addition of nisin during early-log phase has a modest inhibitory effect on cell growth but induction during mid-log phase has a negligible impact on proliferation, suggesting a tradeoff between cell growth rate and duration of induction. We find that a signal peptide such as usp45 is necessary for secretion of SCI-57 into the medium; furthermore, we demonstrate that this secreted SCI-57 is biologically active, as assessed by the ability of conditioned L. lactis medium to stimulate Akt signaling in differentiated 3T3-L1 adipocytes. Finally, we show that the biological activity of SCI-57 was enhanced by near-neutral or slightly alkaline pH during induction, which is comparable to the pH in the small intestine, and by removal of a C-terminal purification tag. This study demonstrates that food-grade bacteria can be engineered to secrete bioactive insulin analogs and opens up the possibility of oral insulin delivery using live microorganisms.