Novel water soluble, biocompatible, and highly viscoelastic polyelectrolyte complexes were prepared by mixing of positively charged chitosan grafted with poly (ethylene glycol) monomethyl ether (CS-g-MPEG) and negatively charged hyaluronic acid (HA). CS-g-MPEGs having different degrees of substitution were synthesized by reacting chitosan with MPEG-aldehyde. The molecular structure, thermal and rheological properties, as well as biocompatibility of CS-g-MPEG/HA complexes were characterized. Rheological results showed that a small amount of HA could greatly enhance the viscosity of CS-g-MPEG solution. The highest viscosity was obtained when the charge ratio of CS-g-MPEG/HA was close to 1.0. Small-angle X-ray scattering measurements provided some insights into the lamellar structure of the CS-g-MPEG/HA complex. The CS-g-MPEG/HA complex system offers promising potentials in pharmaceutical, cosmetic, and biotechnology applications (e.g., cell scaffold, artificial synovial fluid, and drug/gene delivery medium).