A simple and convenient procedure for chemos electively protecting the amino groups of chitosan has been developed to provide N-phthaloyl-chitosan that is indispensable as a soluble N-protected precursor for further controlled modification reactions of chitosan. Although the conventional N-phthaloylation of chitosan in N,N-dimethylformamide was accompanied by partial phthaloylation of the hydroxy groups, the addition of a small amount of hydroxy-containing compounds effectively suppressed the O-phthaloylation. Of some compounds examined, water proved particularly suitable, resulting in the formation of chemoselectively N-phthaloylated chitosan without any appreciable O-phthaloyl groups. The resulting N-phthaloyl-chitosan was found to be crystalline despite the presence of a bulky substituent. A solubility test indicated that N-phthaloyl-chitosan exhibited considerable affinity for organic solvents.