Alditol bearing chitosans have shown the ability to reduce silver ions in mild conditions and without addition of exogenous reducing agents. The ion reduction induces the formation of a lactone moiety on the polysaccharide (Fetizon reaction) without causing C-C bond cleavage on the polyol. The close and multivalent arrangement of the endogenous reducing agent (alditols) on the polysaccharide backbone resulted in the formation of silver nanoparticles (circle divide < 10 nm), which induced a considerable SERS effect and led to hydrogel formation.