The soluble and antibacterial chitosan derivative was prepared on the basis of the regioselective chemical modification. The N-(2-phthaloylation) chitosan was obtained via the reaction of chitosan with phthalic anhydride in N,N-dimethylformamide (DMF) at 130 degrees C, and O-(3,6-hydroxyethyl) chitosan was produced using chlorohydrins as grafting agent and hydrazine hydrate as reductant. The structure of hydroxyethyl chitosan (HC) was characterized by X-ray diffraction (XRD), Fourier Transform infrared spectroscopy (FTIR), and gel permeation chromatography (GPC) respectively. The solubility, anticoagulation, and antibacterial property were assessed separately. The result shows that amine I of chitosan is replaced and the amide II disappears during chemical modification, and the functional groups of C6-OH and -NH2 are also reacted. The water-solubility of the novel chitosan derivative was enhanced relatively; it could even slightly soluble in methanol. The results of platelet adhesion and the activated partial thromboplastin times (APTTs) indicate that grafting hydroxyethyl could improve anticoagulation of chitosan. The antibacterial activity of HC against Enterococcus and E. coli had been much better owing to enhancing the degree of protonation. (C) 2011 Wiley Periodicals, Inc. J Appl Polym Sci, 2012