The rising amount of patients suffering for diabetes mellitus increases the requirements for effective insulin sensors. Carbon materials are a suitable choice for the development of insulin sensors due to their electrochemical characteristics. Pencil graphite electrodes (PGE) represent the trade-off between price and excellent conductive properties. The modification of PGE by NiO and Ni nanoparticles fixed by chitosan results in surface area enlargement and improved electrocatalytic properties. This paper is focused on the comparison of different properties of Ni and NiO nanoparticles and their effect on redox reaction mechanism of insulin and detection characteristics. The electrode modified by Ni nanoparticles displays linear range of 1 μM–5 μM (R2 0.80), limit of detection (LOD) of 4.34 μM and sensitivity of 0.12 μA/μM. On the other hand, the electrode modified by NiO nanoparticles displays enhanced electrochemical characteristics such as linear range of 0.05 μM–5 μM (R2 0.99), limit of detection of 260 nM and sensitivity of 0.64 μA/μM. These properties make the NiO nanoparticles modified PGE the appropriate candidate for insulin determination.