Two water-soluble chitosan-graft-(polyethylenimine-β-cyclodextrin) (CPC) cationic copolymers were synthesized via reductive amination between oxidized chitosan (CTS) and low molecular weight polyethylenimine-modified β-cyclodextrin (β-CD-PEI). The two polycations, termed as CPC1 and CPC2, were characterized by proton nuclear magnetic resonance spectroscopy, gel permeation chromatography, and elemental analysis. These polycations exhibited good ability to condense both plasmid DNA (pDNA) and small interfering RNA (siRNA) into compact and spherical nanoparticles. Gene transfection activity of both polymers showed improved performance in comparison with native CTS in HEK293, L929, and COS7 cell lines. Further investigation of the gene transfection mediated by CPC2/DNA complexes showed both time-dependent and dose-dependent in the tested cell lines, where the polymer showed higher level luciferase expression than commercially available branched PEI (25 kDa) under the condition of high dose or extended time. Gene silencing activity mediated by CPC2/siRNA against luciferase expression showed superior knockdown effect in HEK293 and L929 cell lines. In addition, both polymers exhibited much lower cytotoxicity than PEI (25 kDa) in HEK293, L929, and COS7 cell lines. More interestingly, the pendent β-CD moieties of CPC copolymers allowed the supramolecular PEGylation though self-assembly of adamantyl-modified poly(ethylene glycol) with the β-CD moieties. The supramolecular PEGylation of the polyplexes significantly improved their stability under physiological conditions. The supramolecular PEGylated polyplexes of CPC with pDNA showed decreased transfection efficiency in all tested cell lines. However, remarkably, the supramolecular PEGylated polyplexes with siRNA exhibited even higher silencing efficiency in HEK293 and L929 cells (up to 84%), comparable to commercial DharmaFECT. The interesting mechanism for the enhanced silencing efficiency was discussed. With the pendent β-CD moieties on CTS chains, the system is expected to be further modified via inclusion complexation between β-CD unit and guest molecules to serve as a multifunctional delivery system.