Polyesters with hydrophilic domains, i.e., poly(D,L-lactic-co-glycolic-co-hydroxymethyl glycolic acid) (PLGHMGA) and a multiblock copolymer of poly(ε-caprolactone)-PEG-poly(ε-caprolactone) and poly(L-lactide) ((PC-PEG-PC)-(PL)) are expected to cause less acylation of encapsulated peptides than fully hydrophobic matrices. Our purpose is to assess the extent and sites of acylation of octreotide loaded in microspheres using tandem mass spectrometry analysis. Octreotide loaded microspheres were prepared by a double emulsion solvent evaporation technique. Release profiles of octreotide from hydrophilic microspheres were compared with that of PLGA microspheres. To scrutinize the structural information and localize the actual modification site(s) of octreotide, liquid chromatography ion-trap mass spectrometry (LC-ITMS) was performed on the acylated adducts. Hydrophilic microspheres showed less acylated adducts in comparison with PLGA microspheres. LC-MS/MS showed that besides the N-terminus and primary amine of lysine, the primary hydroxyl of the end group of octreotide was also subjected to acylation. Nucleophilic attack of the peptide can also occur to the carbamate bond presented in (PC-PEG-PC)-(PL) since 1,4-butanediisocyanate was used as the chain extender. Hydrophilic polyesters are promising systems for controlled release of peptide because substantially less acylation occurs in microspheres based on these polymers. LC-ITMS provided detailed structural information of octreotide modifications via mass analysis of ion fragments.