Water-borne polyurethanes based on 4,4-diphenylmethane diisocyanate, poly(butylene adipate), and chain extender N-methyldiethanolamine (MDEA) that provided tertiary amine groups were synthesized. The polyurethane-chitosan (PU/CS) blends can be dissolved in the acetic acid and cast into films. The mechanical properties including tensile strength and elongation, as well as the water absorption and thermal properties of the PU/CS films were evaluated. The tensile strength increased with the increased amount of chitosan, but the elongation decreased accordingly. The chitosan in the blends promoted the water absorption. Chitosan was more thermally-stable than PU, as shown in the thermal gravity analysis. Chitosan also had higher crystallinity, as demonstrated by differential scanning calorimetry. The blends were partial compatible mixtures, based on the data obtained from a dynamic mechanical analysis. Biocompatibility test was conducted utilizing immortalized rat chondrocytes (IRC). After IRC were seeded onto the PU/CS films for 1.5 and 120 h, the number of cells was counted and the morphology of cells was observed by light microscopy and scanning electron microscopy. Blends containing 30% chitosan had more cells attached initially. However, the blends containing more than 70% chitosan appeared to promote the cell proliferation. IRC were round on PU/CS films with more PU, but spread when the chitosan content in blends was higher. Overall, PU/CS films with more chitosan had better mechanical properties as well as biocompatibility. (c) 2007 Wiley Periodicals, Inc.