Cultivation of Absidia coerulea for chitosan production was carried out in a modified airlift reactor with two concentric wire mesh draft tubes. The oxygen requirement for the cultivation was high and the microorganisms were sensitive to shear stress. The modified reactor which had high oxygen transfer capability provided a suitable environment for the cultivation. Production of chitosan in the modified reactor was more than two times higher than those in both the conventional bubble column and the stirred tank fermenter with impeller speed of 600 rpm and 55% higher than that in the stirred tank fermenter with the impeller speed of 300 rpm. By using the proposed reactor, the molecular weight and degree of deacetylation of chitosan at the end of 65 hr cultivation were 1050 kDa and 92.5%, respectively, which were much higher than those using the stirred tank fermenter. The values were 710 kDa and 85.2% for the stirred tank fermenter with impeller speed of 600 rpm; 820 kDa and 88.1% for the stirred tank fermenter with impeller speed of 300 rpm. By using the bubble column, the molecular weight and degree of deacetylation were 950 kDa and 92.2%, respectively.