The present invention is directed to homogeneous phase enzyme-catalyzed processes for producing modified chitosan polymers or oligomers. An enzyme is reacted with a phenolic substrate in the presence of a chitosan polymer or oligomer to produce a modified chitosan polymer or oligomer. The invention also includes modified chitosan polymers or oligomers produced by the novel processes, in particular modified chitosan polymers or oligomers having useful functional properties, such as base solubility and/or high viscosity.