Effect of water-soluble chitosan (WSC) on green mould disease caused by Penicillium digitatum P4 was investigated in vitro and in vivo. Results of the experiments showed that P. digitatum P4 growth was much inhibited by WSC and inhibitory effect increased as WSC concentration increased. In vitro test results indicated that complete inhibition of spore germination and mycelial growth were observed in the medium containing 1 mg/ml WSC. In the in vivo study, WSC treatments significantly reduced disease incidence and lesion diameter of green mould disease on orange fruits. After 8 days of inoculation, the lesion diameter of orange fruits coated by 0.5%, 1%, 1.5% and 2% WSC were 5.49 cm, 5.01 cm, 3.22 cm and 1.87 cm, respectively, which smaller than that of control fruits. Biochemical experiments demonstrated that the activities of the main defense-related enzymes in flavedo tissue including chitinase and β-1,3-glucanase were enhanced by both P. digitatum P4 infection treatment and challenged with P. digitatum P4 and treated with WSC treatment. However, these enzymes of samples inoculated with P. digitatum only were lower than samples inoculated with P. digitatum P4 and treated with 2% WSC concentration. These findings suggest that the in vitro and in vivo effects of WSC on controlling green mould disease may be associated with direct antifungal activities and the elicitation of biochemical defense responses in fruit.