CuO nanoparticles were synthesized in situ during the formation of physically cross-linked chitosan hydrogel beads using sodium tripolyphosphate as the cross-linker. The aim of the study was to investigate whether these nanocomposite beads have the potential to be used in drug delivery applications. The formation of CuO nanoparticles (CuONPs) in the hydrogels was confirmed by X-ray diffraction and scanning electron microscopy studies. SEM micrographs revealed the formation of CuONPs with size range of 10–25nm within the hydrogel matrix. Furthermore, the antibacterial and swelling properties of the beads were studied. The prepared nanocomposite hydrogels showed a pH sensitive swelling behavior. The CuO nanocomposite hydrogels have rather higher swelling in different aqueous solutions in comparison with neat hydrogel. The nanocomposite hydrogels demonstrated good antibacterial effects against Escherichia coli and Staphylococcus aureus bacteria.