The photosensitizer Chlorin e6 (Ce6) has been frequently employed for photodynamic therapy (PDT) of cancer; however, its nonspecific toxicity has limited its clinical applications. In this study, we prepared chitosan nanoparticles (CNPs), with a mean diameter of approximately 130 nm, by a nonsolvent-aided counterion complexation method in an aqueous solution, into which Ce6 could be physically entrapped during the preparation process. These CNPs and Ce6-loaded CNPs (CNPs-Ce6) were fully characterized by UV-vis, photoluminescence, and Fourier transform infrared spectroscopic analysis, as well as dynamic light scattering and transmission electron microscopy measurements. More importantly, the biocompatibility of the otherwise toxic Ce6 was significantly improved upon its loading into the CNPs, as demonstrated by both confocal laser scanning microscopy analysis and 3-(4,5-dimethylthiazo1-2-y1)-2,S-diphenyltetrazolium bromide (MTT) assays. Furthermore, the PDT efficiency of Ce6-loaded CNPs was dramatically enhanced, in comparison with that of the free Ce6, as shown by both MTT and flow cytometry assays. This discovery provides a novel strategy for improving the biocompatibility and therapeutic efficacy of PDT agents by using a natural, biocompatible polysaccharide carrier.