N,O-(2-carboxyethyl)chitosan (N,O-2-CEC) was prepared from chitosan with 3-chloropropionic acid as modifying agent and NaOH as binding-acid agent. 2-Hydroxypropyl dimethylbenzylammonium N,O-(2-carboxyethyl) chitosan chloride (HPDMBA-CEC) was obtained by the reaction of N,O-2-CEC with glycidyl dimethyl benzyl ammonium chloride (GDMBA) using NaOH as catalyst. The structures of chitosan derivatives were characterized by FTIR, H-1 NMR, and gel permeation chromatography. The antimicrobial activity of HPDMBA-CEC was evaluated against a Gram-negative bacterium Escherichia coli (E.coli) and a Gram-positive bacterium Staphylococcus aureus (S. aureus). Compared with CTS, N,O-2-CEC, and HPDMBA-CTS, HPDMBA-CEC had much stronger antimicrobial activity, and this activity increased with increasing substitution degree of quaternary ammonium group (DQ). When the substitution degree of carboxyethylation (DS of CE) was 0.72 and DQ was 0.60, the minimum inhibitory concentrations (MICs) of HPDMBA-CEC were 3.1 and 6.3 mu g/mL against S. aureus and E. coli, respectively. (C) 2008 Wiley Periodicals, Inc. J Appl Polym Sci 111: 3010-3015,2009