A novel pathway is reported to obtain low molecular weight, water-soluble chitosan (LMWSC) via oxidative degradation of chitosan with a catalyst containing active Mo(O2) sites. H2O2 was found to play a fatal role in the regeneration of Mo(O2). Moreover, (TBA)3{PO4[MoO(O2)2]4} can be recovered and reused four times without loss of reactivity.