Our aim was to develop a biocompatible hydrogel that could be soaked in heparin and placed on wound beds to improve the vasculature of poorly vascularized wound beds. In the current study, a methodology was developed for the synthesis of a new chitosan derivative (CSD-1). Hydrogels were synthesized by blending CSD-1 for either 4 or 24 h with polyvinyl alcohol (PVA). The physical/chemical interactions and the presence of specific functional groups were confirmed by Fourier transform infrared (FT-IR) spectroscopy and proton nuclear magnetic resonance (1H NMR). The porous nature of the hydrogels was confirmed by scanning electron microscopy (SEM). Thermal gravimetric analysis (TGA) showed that these hydrogels have good thermal stability which was slightly increased as the blending time was increased. Hydrogels produced with 24 h of blending supported cell attachment more and could be loaded with heparin to induce new blood vessel formation in a chick chorionic allantoic membrane assay.