This study was designed to examine the effect from dyeing wool fabrics when they are first treated with low-molecular-weight chitosan (LWCS). First, we created LWCS from chitosan using different concentrations of hydrogen peroxide, and then we analyzed its properties. The molecular weight and the viscosity of LWCS decreased with increased concentrations of hydrogen peroxide. Next we examined the effect that treatment with LWCS had on the wool fabrics. The shrink-resistance and antibacterial properties of dyed fabrics as well as the color intensity (K/S) were inversely proportional to the LWCSmolecular weight and directly proportional to the LWCS concentration. However, the K/S of the treated fabrics peaked when the LWCS concentration reached 4%. Treating fabrics with LWCS before dyeing had a positive effect on dyeing, shrinkage, and antibacterial wash fastness measured after 20 washes.