Three anionic chitosan surfactant with different hydrophobic tails labeled Chitosan-R8, Chitosan-R12 and Chitosan-R16 were prepared and their surface behavior in aqueous solution was determined by surface tension measurements at three different temperatures 20, 40 and 60 °C. The affinity of the synthesized anionic chitosan surfactant to form micelle enhanced with increasing the hydrophobic chain length as well as raising the solution temperature up to 60 °C. The anionic chitosan surfactant showed a great influence as capping agent for the in-situ preparation of silver nanoparticles (AgNPs) based on photochemical reduction method using sunlight as reducing agent. The chemical structure of chitosan surfactant showed a great effect on the size and stability of the prepared AgNPs. The Chitosan-R16 with longer hydrophobic tail, produce a uniform, small size & stable AgNPs compared to shorter tail Chitosan-R12 & Chitosan-R8. The prepared anionic chitosan showed good inhibiting effect against the steel corrosion in the 1.0 M HCl. The corrosion inhibition efficiency was determined using three different techniques, proving the ability of the new chitosan surfactant to inhibit the steel corrosion. The XPS results confirmed the formation of chitosan inhibitor on the steel surface.