A diisocyanate-modified chitosan (DIMC) was synthesized via a cross-linking reaction with chitosan and diphenyl methane diisocyanate. The structural and thermal properties of the DIMC were systematically characterized by FTIR, UV–vis, TGA, DSC, XRD and SEM. In addition, the optical properties were evaluated by photoluminescence. Finally, the antibacterial activities of the synthesized DIMC were examined against Escherichia coli and Staphylococcus pyogenes bacteria by agar plate diffusion method. The DIMC showed better degree of bacterial growth inhibition against E. coli as compared with unaltered chitosan. These results suggest that the synthesized chitosan xerogel could be used as a novel biodegradable material with improved antibacterial properties for biomedical applications.