The high surface hydrophilicity of chitosan is the property which has allowed the synthesis of an efficient, selective, and stable palladium supported aqueous phase catalyst for the reaction of allylic substitution of (E)-cinnamyl ethyl carbonate by morpholine. The adjustment of the water content of the catalytic solid and the addition of a cationic surfactant (CTAB) in the medium both contribute to improve drastically the efficiency of the catalyst while keeping the palladium leaching below 0.5%.