Chitosan (CS) has attracted much attention due to its good antibacterial activity and biocompatibility.However, CS is insoluble in neutral and alkaline aqueous solution, limiting its biomedical application tosome extent. To circumvent this drawback, we have synthesized a novel N-quaternary ammonium-O-sulfobetaine-chitosan (Q3BCS) by introducing quaternary ammonium compound (QAC) and sulfobetaine,and its water-solubility, antibacterial activity and biocompatibility were evaluated compare to N-quaternary ammonium chitosan and native CS. The results showed that by introducing QAC, antibacterialactivities and water-solubilities increase with degrees of substitution. The largest diameter zone of inhi-bition (DIZ) was improved from 0 (CS) to 15 mm (N-Q3CS). And the water solution became completelytransparent from pH 6.5 to pH 11; the maximal waters-solubility was improved from almost 0% (CS) to 113% at pH 7 (N-Q3CS). More importantly, by further introducing sulfobetaine, cell survival rate ofQ3BCS increased from 30% (N-Q3CS) to 85 % at 2000 μg/ml, which is even greater than that of nativeCS. Furthermore, hemolysis of Q3BCS was dropped sharply from 4.07% (N-Q3CS) to 0.06%, while thewater-solution and antibacterial activity were further improved significantly. This work proposes anefficient strategy to prepare CS derivatives with enhanced antibacterial activity, biocompatibility andwater-solubility. Additionally, these properties can be finely tailored by changing the feed ratio of CS,glycidyl trimethylammonium chloride and NCO-sulfobetaine