Chitosan is a natural mucoadhesive, biodegradable, biocompatible and nontoxic polymer which has been used in pharmaceutical industry for a lot of purposes such as dissolution enhancing, absorption enhancing, sustained releasing and protein, gene or drug delivery. Two major disadvantages of chitosan are poor solubility in physiological pH and low efficiency for protein and gene delivery. In this study thiolated methylated N-(4-N,N-dimethylaminobenzyl) chitosan was prepared for the first time in order to improve the solubility and delivery properties of chitosan. This novel chitosan derivative was characterized using H NMR, Ellman test, TGA and Zetasizer. Cell toxicity studies were performed on Human Embryonic Kidney 293 (Hek293) cell line using XTT method, to investigate the potential effect of this new derivative on cell viability. H NMR results showed that all substitution reactions were successfully carried out. Zeta potential of new derivative at acidic and physiological pHs was greater than chitosan and it revealed an increase in solubility of the derivative. Furthermore, it had no significant cytotoxicity against Hek293 cell line in comparison to chitosan. These findings confirm that this new derivative can be introduced as a suitable compound for biomedical purposes.