5-fluorouracil (5-FU) is a specific anti-cancer agent that is generally used to treat gastrointestinal, colorectal, and breast cancer. In this work, chitosan (CS) was extracted from local fish scales using an established method. 5-FU was then converted to 1-acetic acid-5-fluorouracil (FUAC) and reacted with this CS to prepare chitosan-1-acetic acid-5-fluorouracil (CS-FUAC) conjugates as a colon-specific prodrug. All compounds were characterized by Proton nuclear magnetic resonance (1H-NMR), Fourier-transform infrared (FTIR), and UV-visible spectroscopy. The synthesized compound was subjected to a chemical stability study in phosphate buffer (0.2 M, pH 7.4) and in KCl/HCl buffer (0.2 M, pH 1.2) at different time intervals (0–240 min) and incubation at 37 °C. This revealed a significantly greater stability and a longer half-life for the CS-FUAC than for FUAC. Hemolytic activity results indicated a much lower toxicity for CS-FUAC than for 5-FU and supported consideration of CS-FUAC for further biological screening and application trials. The percentage of FUAC in the conjugates was determined by subjecting the prodrug to treatment in basic media to hydrolyze the amide bond, followed by absorbency measurements at 273 nm. The cytotoxicity studies of the conjugates were also evaluated on human colorectal cancer cell line (HT-29), which showed that the conjugates are more cytotoxic than the free drug. Therefore, CS-FUAC conjugates can be considered to represent potential colon-specific drug delivery agents, with minimal undesirable side effects, for colon cancer therapy.