Novel water-soluble polymers, N-(γ-propanoyl-valin)-chitosan and N-(γ-propanoyl-aspartic acid)-chitosan, were synthesized by reaction of low molecular weight chitosan with Nα-(3-bromopropanoyl)-valine and Nα-(3-bromopropanoyl)-aspartic acid, respectively, under mild conditions. Prior to reaction with chitosan, the peptide substituents have been prepared by standard peptide chemistry methods from 3-bromopropanoic acid and the relevant α-amino acid tert-butyl esters. The chemical structure and physical properties of the novel chitosan derivatives were characterized by 1H NMR and IR spectroscopy. The polymers are highly soluble in a wide pH range, which opens new perspectives for the applications of chitosan-based materials.