N-Stearoyl chitosan was prepared to investigate the film properties as semipermeable membrane. N-Stearoyl chitosan was synthesized by the stearoylation of chitosan which was from chitin by deacetylation with alkali. Thus prepared chitosan sample had 87% of total possible acetylamino group deacetylated. Extent of N-stearoylation was 17%. This sample of N-stearoyl chitosan was soluble in formic acid and water-swelling films could be cast from formic acid solution. Thus prepared films had wet thickness, 18-22μ, and dry thickness, 12-13μ, indicating 15.8% wafter absorption. Presently prepared N-stearoyl chitosan film had exclusion limit around 4,000 molecular weight, this value is in contrast with chitin (10,000) and acetyl chitin (7,500). Polyethylene glycols had larger rejection efficiency than amino acids and saccharide toward solutes of similar molecular weight. This correlates well with the distribution coefficient for the various solutes. The flux through the membranes was characterized in terms of convective and diffusive flow, and found to be the combination of both types of flow.