This study investigated the effect of chitosan particle sizes on the properties of carboxymethyl chitosan (CMCh) powders and films. Chitosan powders with different particle sizes (75, 125, 250, 450 and 850 µm) were used to synthesize the CMCh powders. The yield, degree of substitution (DS), and water solubility of the CMCh powders were then determined. The CMCh films prepared with CMCh based on chitosan with different particle sizes were fabricated by a solution casting technique. The water solubility, mechanical properties, and water vapor transmission rate (WVTR) of the CMCh films were measured. As the chitosan particle size decreased, the yield, DS, and water solubility of the synthesized CMCh powders increased. The increase in water solubility was due to an increase in the polarity of the CMCh powder, from a higher conversion of chitosan into CMCh. In addition, the higher conversion of chitosan was also related to a higher surface area in the substitution reaction provided by chitosan powder with a smaller particle size. As the particle size of chitosan decreased, the tensile strength, elongation at break, and WVTR of the CMCh films increased. This study demonstrated that a greater improvement in water solubility of the CMCh powders and films can be achieved by using chitosan powder with a smaller size.