For applications in biotechnology to prepare biopolymers containing functional groups is essential. In addition, these materials have to be strong to provide physical support for practical applications. Recently, chitosan, polycaprolactone (PCL), and their various combinations were used for this purpose. In this work, we described the preparation and characterization of a new biodegradable polymeric gel containing chitosan and PCL. The gel preparation reactions were performed in suitable acetic acid solutions to obtain the products in high yields. A crosslinking agent was added to produce crosslinked gels. Swelling behavior of chitosan/PCL gels in different compositions was studied, and the results were compared. The chitosan/PCL gels show a rather large equilibrium swelling in water and in the phosphate buffered saline solution. Acrylic acid (AA) was added to these gels during preparation process to obtain a stable material for various applications. These polymeric gels were characterized by Fourier transform infrared. Their physical and morphological properties were investigated by using differential scanning calorimeter and scanning electron microscope techniques, respectively. Cell growth experiments indicate that chitosan, a positively charged polysaccharide, is not suitable for cell proliferation studies. On the other hand, the drug release studies were successful and, 59% of lidocaine, was released from a chitosan/PCL/AA hydrogel in buffer solution at pH 7.4 at 37 degrees C. (C) 2010 Wiley Periodicals, Inc. J Appl Polym Sci 119: 2885-2894, 2011