Water-soluble chitosan (WSC) was prepared by hydrolyzing chitosan with commercial glucoamylase. Factors affecting the enzymatic hydrolysis of chitosan were investigated, and the optimum hydrolysis conditions were as follows: time, 24 h; pH, 4.5; temperature, 55 °C; amount of glucoamylase, 40 mg/500 mL of reaction mixture (26.8 U of chitosanase activity). Under these conditions, the weight-averaged molecular weight (Mw) of chitosan decreased to 1,700 Da. The hydrolysate was neutralized with 1 M NaOH, filtrated, concentrated to 16% (w/v), and precipitated with 5 volumes of ethanol. The product of WSC was obtained by drying the precipitate at 60 °C for 3 h. The content of WSC in the product and the yield of WSC were 95.3% (w/w) and 94.2% (w/w), respectively. The structure of WSC was characterized by Fourier transform infrared spectroscopy (FTIR).