Modifying cationic polymers by conjugating a pendant group is a commonly used approach for improving the biological efficacy of gene delivery. Polyethylenimine (PEI) of MW 25,000, a potent cationic polymer for gene delivery, was employed as the primary carrier. Three different types of PEI conjugates were prepared by grafting cellobiose, polyethylene glycol of MW 350 (PEG), and 1-iodododecane, respectively, to assess the hydrophobic effect on the biological efficacy and chemicophysical properties of the DNA–polymer complexes. Increasing the hydrophobicity of the conjugate was found to decrease the biological efficacy including the levels of transgene expression and cellular viability. When the conjugate hydrophobicity was high enough to form micelles below 0.11 mg/mL, the reduction in transgene expression became moderated but was accompanied with a sharp decrease in cellular viability. On the other hand, when the conjugate hydrophobicity was decreased by conjugating PEG or cellobiose at the optimal % of around 1.2%, the level of transgene expression was enhanced while at the same time maintaining the cellular viability and the chemicophysical properties of the complexes. These results suggested that a hydrophilic pendant group could better promote the biological efficacy of PEI by decreasing the hydrophobicity.