This study was to evaluate the preservative effect of chitosan with 1,3-butylene glycol as natural preservative in cosmetic formulation. Antibacterial activity was measured by disc diffusion assay and broth microdilution assay were assessed on human skin microorganisms, Staphylococcus aureus, methicillin-resistant Staphylococcus aureus, and Escherichia coli. Antioxidant activity was measured by DPPH radical scavenging assay. Furthermore, an optimum formulation of chitosan with 1,3-butylene glycol was confirmed the preservative effect and cytotoxicity through challenge test and cell cytotoxicity assay. Chitosan showed remarkable antibacterial and antioxidant activities. A combination of chitosan with 1,3-butylene glycol exhibited higher activity compared to chitosan alone. Through results, the optimum formulation was determined to 156 μg/mL chitosan with 10% 1,3-butylene glycol (CTSN-BG). CTSN-BG showed a potent preservative effect and non-cytotoxicity on HaCaT and HEK 293 cells. In conclusion, the results demonstrated that CTSN-BG may be useful in a wide range of substitutes for chemical preservatives in cosmetic industry.