Absorbable and non-absorbable dressings have been fabricated into sponges via a modified thermally induced phase separation method, using a grafted derivative of chitosan with 2-hydroxyethylacrylate (CS-g-PHEA). The material was synthesized via free-radical polymerization and was characterized with FT-IR and (1)H NMR spectroscopies. The swelling ability, biocompatibility and biodegradability of the dressings were evaluated through in vitro assays while antibacterial studies were performed using three different bacterial strains, Methicillin susceptible Staphylococcus aureus (MSSA), Methicillin resistant Staphylococcus aureus (MRSA) and Pseudomonas aeruginosa. Levofloxacin was used as model drug at different concentrations. Morphological characterization of the drug loaded dressings was performed by scanning electron microscopy, while drug-matrix interactions were evaluated by FT-IR spectroscopy. X-ray diffraction studies were carried out for the identification of the physical state for both neat and drug loaded materials. The prepared dressings showed a significant inhibition zone of the bacteria indicating the antibacterial property of the materials and loaded sponges.