Chitosan microcarriers were prepared using oxidized lactose as a cross-linking agent which was oxidized by sodium periodate. The effect of amount of oxidized lactose on the preparation of chitosan microcarriers was studied and optimized. Rat hepatocytes cultivated on chitosan microcarriers cross-linked by oxidized lactose retained the spherical shape as they have in vivo. Liver-specific functions such as albumin secretion and glucose metabolism were stably maintained for seven days. The metabolic activities of hepatocytes cultured on the oxidized lactose cross-linked chitosan microcarriers were higher than those of hepatocytes on chitosan microcarriers cross-linked by glutaraldehyde and on cytodex 3. The results suggest that oxidized lactose could be an interesting cross-linking agent for chitosan thus reducing the toxic side effects caused by using glutaraldehyde.