In this study, a series of chitosan-based hetero-aromatic β-ketosulfone derivatives (CsB-β-KS)A1-4 was synthesized and applied as promising fluorescent chemosensors as well as biologically active compounds. First, 1-(4-aryl)-2-(phenylsulfonyl) ethanone derivatives A1-4 were synthesized from the corresponding keto-bromide derivatives; after that, A1-4 derivatives were condensed with so-called pure chitosan (CS) in mild acidic conditions. The chemical structures were confirmed and discussed in detail by various common tools, including Fourier-transform infrared spectroscopy, X-ray diffraction, and thermo-gravimetric analysis. All of the thermo-gravimetric curves show similar thermal behavior, except for (CsB-β-KS)A3, which has less thermal stability than the others. The biological activity showed antimicrobial inhibitory activity against the tested Gram-positive, Gram-negative bacteria and fungi. The derivative (CsB-β-KS)A3 exhibited potent inhibitory action against Bacillus subtilis and Staphylococcus aureus, with inhibition zones of 18 and 20 mm, respectively. It also had moderate inhibitory activity against Aspergillus Niger, with an inhibition zone of 15 mm. Furthermore, the (CsB-β-KS)A3 derivative was used as a fluorescent chemosensor for selective Fe3+ metal ions. The data showed that the (CsB-β-KS)A3 derivative’s fluorescence intensity dropped significantly as the concentration increased. (CsB-β-KS)A3 derivative can be classified as a fluorescent chemosensor for the detection of Fe3+ metal ions. Additionally, the Benesi-Hildebrand and Stern-Volmer mechanisms explained the quenching behavior. The limit of detection and the limit of quantification values for (CsB-β-KS)A3 at various concentrations of Fe3+ ions were displayed as 9.62 × 10−10 and 3.20 × 10−9 mole/L, respectively.