Chitosan was reacted with "Polyethylene glycol monomethacrylate" (PEGm) using a redox initiation method. Different compositions were prepared by varying the relative amount of PEGm in the feed. A maximum of 88% yield with 320% grafting could be achieved. The graft copolymerization was confirmed by FTIR, thermal, and XRD studies. Higher graft % could be achieved as the monomer used is a macro monomer of PEG and the resultant graft is a comb-like polymer. Grafting with PEGm did not affect the thermal stability of chitosan film significantly, however, it resulted in a marginal increase in the tensile strength of the films in the dry state. The products showed much improved swelling at pH 7.4 and pH 1.98 compared to the virgin chitosan. The preliminary biocompatibility evaluation showed that the materials are blood compatible and non-cytotoxic. Though the permeability to low molecular weight solutes like creatinine and glucose was equal to or better than commercial cellulose membranes, the copolymer films expressed comparatively less permeability to these solutes initially, due to the crystalline domains of PEO grafts that impede the transport. On exposure in the medium, this effect is nullified culminating in better permeability. The crystallization of PEG grafts was very helpful in preventing the permeation of the high molecular weight solute albumin, the leakage of which above a certain limit is dangerous to the patient. (C) 2009 Wiley Periodicals, Inc. J Appl Polym Sci 114: 2873-2886, 2009