Chitosan exhibits poor solubility above pH 6 which prevents absorption at treatment sites in the colon. pH titrations and infrared methods were used to determine the degree of deacetylation of the starting chitosan. In the present work, N,N-diethyl N-methyl chitosan (DEMC) was synthesized based on a modified two-step process via a 22 factorial design to optimize the preparative conditions. DEMC chloride was characterized using FTIR and 1H NMR spectroscopy. For pharmacological and pharmaceutical applications, DEMC needs to have specific degrees of quaternization. Based on the 1H NMR data, a high degree of quaternization was achieved by the two-step process. The N-diethyl methyl chitosan chlorides were completely soluble in water at room temperature. Sodium fluorescein and brilliant blue were used as model reagents for in vitro colonic absorption studies. These studies show a significant increase in the absorption of sodium fluorescein and brilliant blue in the presence of DEMC in comparison with normal chitosan. DEMC with positive charge is able to interact with tight junctions of colon epithelial cells and hence increased the permeability of sodium fluorescein and brilliant blue across the tight junctions. These investigations demonstrated that the DEMC derivative of chitosan could have a significant effect on colonic drug absorption.