As part of our ongoing effort to develop a biodegradable nerve guidance channel based on chitin/chitosan, we conducted a systematic in vitro study on the biodegradation and neural cell compatibility of chitosan and N-acetylated chitosan. The in vitro degradation (pH 7.4, 37 degrees C) in the presence of 1.5 microg/ml lysozyme showed a progressive mass loss to greater than 50% within 4 weeks for films with 30-70% acetylation. In contrast, the degradation of samples with very low or high acetylation was minimal over the 4-week period. Neural cell compatibility of chitosan and N-acetylated chitosan was tested using primary chick dorsal root ganglion (DRG) neurons. All chitosan-based films showed DRG cell adhesion after 2 days of culture. However, cell viability decreased with increasing acetylation. Chitosan that was 0.5% acetylated had the greatest cell viability, which was approximately 8 times higher than that of chitosan that was 11% acetylated. Chitosan with 0.5% and 11% acetylation showed more and longer neurites than the other samples studied. Thus chitosan amine content can be tuned for optimal biodegradation and cell compatibility, which are important for tissue engineering in the nervous system.