Recombinant interferon-beta-1b (IFN-beta-1b) is used clinically in the treatment of multiple sclerosis. In common with many biological ligands, IFN-beta-1b exhibits a relatively short serum half-life, and bioavailability may be further diminished by neutralizing antibodies. While PEGylation is an approach commonly employed to increase the blood residency time of protein therapeutics, there is a further requisite for molecular engineering approaches to also address the stability, solubility, aggregation, immunogenicity and in vivo exposure of therapeutic proteins. We investigated these five parameters of recombinant human IFN-beta-1b in over 20 site-selective mono-PEGylated or multi-PEGylated IFN-beta-1b bioconjugates. Primary amines were modified by single or multiple attachments of poly(ethylene glycol), either site-specifically at the N-terminus, or randomly on the 11 lysines. In two alternate approaches, site-directed mutagenesis was independently employed in the construction of designed IFN-beta-1b variants containing either a single free cysteine or lysine for site-specific PEGylation. Optimization of conjugate preparation with 12 kDa, 20 kDa, 30 kDa, and 40 kDa amine-selective PEG polymers was achieved, and a comparison of the structural and functional properties of the IFN-beta-1b proteins and their PEGylated counterparts was conducted. Peptide mapping and MALDI-TOF mass spectrometric analysis confirmed the attachment sites of the PEG polymer. Independent biochemical and bioactivity analyses, including antiviral and antiproliferation bioassays, circular dichroism, capillary electrophoresis, flow cytometric profiling, reversed phase and size exclusion HPLC, and immunoassays demonstrated that the functional activities of the designed IFN-beta-1b conjugates were maintained, while the formation of soluble or insoluble aggregates of IFN-beta-1b was ameliorated. Immunogenicity and pharmacokinetic studies of selected PEGylated IFN-beta-1b compounds in mice and rats demonstrated both diminished IgG responses, and over 100-fold expanded AUC exposure relative to the unmodified protein. The results demonstrate the capacity of this macromolecular engineering strategy to address both pharmacological and formulation challenges for a highly hydrophobic, aggregation-prone protein. The properties of a lead mono-PEGylated candidate, 40 kDa PEG2-IFN-beta-1b, were further investigated in formulation optimization and biological studies.