Bacterial cellulose-chitosan composites (BC-Ch) were prepared in order to obtain the BC-Ch composites with improved physico-mechanical characteristics. BC sheets were immersed in a Ch solution hoping that the Ch penetrates into the BC sheet. Ch penetration was observed according to variations in temperature, operation mode and treatment time. The morphological changes due to enhanced penetration were observed through FE-SEM, FT-IR and XRD analysis. FE-SEM analyses confirmed the formation of three dimensional multilayered structures in BC-Ch, whose thickness increased with Ch penetration. The FT-IR analysis showed intermolecular hydrogen bonding interaction between the BC and Ch molecules. XRD results revealed a slight decrease in the crystallinity index of the BC-Ch composites compared to pure BC. The mechanical properties, water holding capacity (WHC) and water release rate (WRR) of the BC-Ch composites were significantly improved compared to pure BC. The superior mechanical properties, WHC and water release rate would make the BC-Ch composites suitable for wound dressing and other biomedical applications.