Films of poly(vinyl alcohol)(PVA)/chitosan blends and its blend hydrogels were prepared by the solution casting method. The state of miscibility of the blends and blend hydrogels were examined over the entire composition range by differential scanning carorimetry (DSC), thermogravimetry (TGA), and dynamic mechanical analysis (DMA). DSC analysis shows the depression of melting point of PVA in the blends and the decrease of crystallization temperature of PVA in the blends were observed with increasing chitosan content in the blends. TGA analysis indicates that chitosan was thermally more stable than PVA and the thermal stability of PVA in the blends was higher than that of pure PVA, due to some interactions between two component polymers in the blend. The glass transition temperature $(T_g)$ of the chitosan and of PVA, measured by DMA, were at 160 and $90^{circ}C$, respectively. The $T_g$ of the blends was changed with the content of chitosan in the blends. The results of thermal and viscoelastic analysis indicate some miscibility between component polymers in the blend exists. Moisture and cross linking in the blend and blend hydrogel, which strongly change thermal and physical properties of hydrophilic polymers, affected the miscibility of chitosan and PVA to a small extent.