Chitosan (beta-1,4-D-glucosamine), a polysaccharide with excellent biological properties, has been widely used in biomedical fields, but many barriers still exist to its broader usage due to its chemical and physical limitations. Further work is needed to improve these properties, but changes of the chemical and physical properties will influence its biocompatibility, so the biological attribute of modified chitosan must be evaluated. In this study, the biocompatibility of chitosan modified by several methods was carefully evaluated at the cellular and protein levels using different physical and biological methods. The results provide a theoretical basis for screening biomaterials. We studied the properties of five kinds of materials made by blending chitosan with different types of polyethylene glycol (PEG). The properties included physical and chemical properties, such as mechanical strength, static contact angle, spectroscopy, thermodynamic attributes and so on. The mechanical properties were slightly improved with the proper amount of PEG, but the improvement was not obvious and was destroyed by the wrong proportion of PEG. Cultures of the cells and amounts and structures of the adsorbed proteins on different materials showed that the PEG effectively improved the biocompatibility of the materials. The PEG enhanced the protein adsorption, cell adhesion, growth and proliferation, but the effects were impaired by excessive PEG. The experiments also demonstrated that the optimum PEG concentration helped to maintain the natural structure of the protein adsorbed on the materials and that maintaining the natural structure benefited cell growth. Analysis of the results based on the intramolecular and intermolecular interaction forces leads to a basic theory for the modification of biomaterials.