Chitosan (CS)-based photo-cross-linkable hydrogels have gained increasing attention in biomedical applications. In this study, we grafted CS with gallic acid (GA) by carbodiimide chemistry to prepare the GA-CS conjugate, which was subsequently modified with methacrylic anhydride (MA) modification to obtain the methacrylated GA-CS conjugate (GA-CS-MA). Our results demonstrated that the GA-CS-MA hydrogel not only exhibited improved physicochemical properties but also showed antibacterial, antioxidative, and anti-inflammatory capacity. It showed moderate antibacterial activity and especially showed a more powerful inhibitory effect against Gram-positive bacteria. It modulated macrophage polarization, downregulated pro-inflammatory gene expression, upregulated anti-inflammatory gene expression, and significantly reduced reactive oxygen species (ROS) and nitric oxide (NO) production under lipopolysaccharide (LPS) stimulation. Subcutaneously implanted GA-CS-MA hydrogels induced significantly lower inflammatory responses, as evidenced by less inflammatory cell infiltration, thinner fibrous capsule, and predominately promoted M2 polarization. This study provides a feasible strategy to prepare CS-based photo-cross-linkable hydrogels with improved physicochemical properties for biomedical applications.