Chitosan a natural based polymer is non-toxic, biocompatible and biodegradable. Chemical modification of chitosan to generate new bifunctional materials and finally would bring new properties depending on the nature of the group introduced. In our present study, we prepared phosphorylated chitosan (P-chitosan) by using H(3)PO(4)/P(2)O(5)/Et(3)PO(4)/hexanol method. From our present method, we got high yield and high degree of substitution (DS). The prepared P-chitosan (DS-1.18) was characterized by FT IR, (13)C NMR, (31)P NMR, elemental, XRD, TGA, DTA and SEM studies. After the phosphorylation, the solubility of the polymer was improved. The P-chitosan showed less thermal stability and crystallinity than the chitosan. It was due to the phosphorylation.