The Michael type reaction of chitosan with ethyl acrylate has been investigated. Although this reaction was quite slow in the case of chitosan, the reiteration of the reaction was an effective means for increasing the degree of substitution (DS) of ethyl ester. The N-carboxyethylchitosan ethyl ester as an intermediate was successfully substituted with various hydrophilic amines, although the simultaneous hydrolysis of the ester to carboxylic acid also occurred. Water-soluble chitosan derivatives were obtained by substitution with hydroxyalkylamines and diamines.