Arginine-rich peptides have attracted considerable attention due to their distinct internalization mechanism. It was reported that arginine and guanidino moieties were able to translocate through cell membranes and played a critical role in the process of membrane permeation. In this work, arginine was conjugated to the backbone of chitosan to form a novel chitosan derivative, arginine modified chitosan (Arg-CS). Arg-CS/DNA complexes were prepared according to the method of coacervation process. The physicochemical properties of Arg-CS and Arg-CS/DNA complexes were characterized and the transfection activity and efficiency mediated by Arg-CS/DNA complexes were investigated taking HeLa cells as target cells. Arg-CS was characterized by FTIR and 13C NMR. Arg-CS/DNA polyelectrolyte complexes were investigated by agarose gel retardation, dynamic light scattering (DLS) and atomic force microscopy (AFM). The results revealed that the Arg-CS/DNA complexes started to form at N/P ratio of 2:1, and the size of particles varied from 100 to 180 nm. The cytotoxicity of Arg-CS and their complexes with plasmid DNA were determined by MTT assay for HeLa cells, and the results suggested that Arg-CS/DNA complexes were slightly less toxic than Arg-CS. Moreover, the derivative alone and their complexes showed significantly lower toxicity than PEI and PEI/DNA complexes, respectively. Taking HeLa cells as target cells and using pGL3-control as reporter gene, the luciferase expression mediated by Arg-CS was greatly enhanced to about 100 folds compared with the luciferase expression mediated by chitosan at different pH media. These results suggest that Arg-CS is a promising candidate as a safe and efficient vector for gene delivery and transfection.