Cross-linked thiolated polyvinyl alcohol (TPVA) hydrogels were synthesized by a two-step functionalization process, i.e., esterification and cross-linking of polyvinyl alcohol (PVA) hydrogel. PVA was esterified with thioglycolic acid and was subsequently cross-linked with sodium trimeta phosphate (STMP). The cross-linked TPVA was utilized as chelating material for arsenite As(III) binding. Atomic absorption spectroscopy (AAS) was used to detect and monitor As(III) concentration in water. Various parameters affecting the arsenic removal process were investigated. It was observed that the cross-linked TPVA behaves as an excellent chelating material for As(III). A maximum removal efficiency of 94% was achieved under our experimental conditions. To investigate the interaction of As(III) with functional groups before and after the removal process, attenuated total reflectance-infrared (ATR) was used. The microanalysis of elements present in samples was carried out by energy dispersive X-ray microanalysis. The material showed good regeneration ability along with antimicrobial activity against both bacterial and fungal strains.