The effects of novel quaternary chitosan derivatives on the paracellular transport of mannitol and cell viability were studied in the Caco-2 cell model. The N-betainate derivative with the degree of substitution of 0.05 was very effective at 1.0% (w/v) concentration. The activity decreased as the degree of substitution increased. The cytotoxicity of N-betainates was rather low. The N-piperazines were at least equally effective as the N-betainates with a similar degree of substitution (>0.15). Most of the N-piperazines did not exert toxic effects on the cell monolayers. Overall, the inverse proportionality between the degree of substitution and activity suggests that an intact chitosan backbone is essential for the bioactivity of chitosan derivatives. The quaternary group does not substitute for the activity of the free amine group. In particular, the N-betainate derivatives of chitosan should contain only the minimum number of substituents required for water solubility.