In this study, the chemical modification of chitosan using itaconic acid as a natural-based unsaturated dicarboxylic acid was investigated. In an aqueous environment, the amine group of chitosan reacts with itaconic acid to produce a chitosan derivative with pyrrolidone-4-carboxylic acid group. On the basis of the elemental analysis, 15% of the amine groups of chitosan reacted, thus creating modified chitosan with amine and carboxylic acid functionalities. Due to the presence of amine and carboxylic acid groups, the surface charge properties of the chitosan were notably altered after itaconic acid modification. In an aqueous solution, the modified chitosan exhibited zwitterionic properties, being cationic at low pH and turning anionic when the pH was increased over 6.5, whereas the original chitosan remained cationic until pH 9. Furthermore, it was demostrated that the modified chitosan was suitable for the preparation of a self-standing film with similarly high transparency but notably higher mechanical strength and oxygen barrier properties compared to a film made from the original chitosan. In addition, the thermal stability of the modified chitosan film was higher than that of the original chitosan film, and the modified chitosan exhibited flame-retardant properties.