This study was performed to evaluate the ability of N-(2-hydroxypropyl)-3-tri methylammonium chitosan chloride (HTCC), the cationically modified chitosan, to form biologically inactive complexes with unfractionated heparin and thereby blocking its anticoagulant activity. Experiments were carried out in rats in vivo and in vitro using the activated partial thromboplastin time (APTT) and prothrombin time (PT) tests for evaluation of heparin anticoagulant activity. For the first time we have found that HTCC effectively neutralizes anticoagulant action of heparin in rat blood in vitro as well as in rats in vivo. The effect of HTCC on suppression of heparin activity is dose-dependent and its efficacy can be comparable to that of protamine-the only agent used in clinic for heparin neutralization. HTCC administered i.v. alone had no direct effect on any of the coagulation tests used. The potential adverse effects of HTCC were further explored using rat experimental model of acute toxicity. When administered i.p. at high doses (250 and 500 mg/kg body weight), HTCC induced some significant dose-dependent structural abnormalities in the liver. However, when HTCC was administered at low doses, comparable to those used for neutralization of anticoagulant effect of heparin, no histopathological abnormalities in liver were observed.