N,O-hexanoyl chitosan (HC) displayed unique properties of excellent processibility, solubility in common organic solvents and cationic characteristics, thereby might find versatile applicaions for biomedical engineering. In this study, the biocompatibility of HC was evaluated. The effect of HC on dermal fibroblast attachment, proliferation and viability was examined in vitro, in comparison with poly(lactide-co-glycolide) (PLGA) and chitosan. The in vivo tissue response to HC was compared with PLGA implanted subcutaneously; the weight loss of the implant materials was also measured duing the degradation process. It was found that HC had no deleterious effect on the viability of dermal fibroblast. In vivo, HC displayed a favorable tissue response profile compared with PLGA, with significantly less inflammation and fibrosis. The erosion rate of HC could be modulated by changing the degree of substitution of hexanoyl groups in HC.