A selectively side-modified chitosan derivative, N-phthaloyl chitosan (PhthCs), was prepared. Five techniques, including circular dichroism (CD) spectropolarimetry, ultraviolet-visible (UV-vis) spectroscopy, small-angle light scattering (SALS), polarized optical microscopy (POM), and differential scanning calorimetry (DSC), were simultaneously applied to investigate the order-disorder phase transition for the lyotropic PhthCs/dimethyl sulfoxide system. POM observations suggested that the critical concentration was 48w%, which agreed well with the DSC measurements. A four-leaf SALS picture was recorded in biphasic solutions. The four-leaf type became a circular symmetric scattering picture with a further increase in the concentration. A sharp peak at 330 nm was recorded in dilute isotropic solutions with CD measurements. The sharp peak turned into a broad tailed peak from 330 to 800nm after the phase transition occurred. The sharp peak was induced by a chromophore (phthoyl group). The broad peak was attributed to the formation of short-range-ordered organization in the concentrated solutions. In UV-vis studies, when the system varied from isotropic to anisotropic, the absorption band turned into platform. These five techniques were proven to be feasible methods for measuring the phase transition of cholesteric liquid crystals.