The aggregation phenomena in aqueous solutions of hydrophobically modified (HM) chitosan, containing 4 mol % of n-dodecyl side chains, were studied by viscometry and fluorescence spectroscopy with pyrene as a probe. The results are compared with those for unmodified chitosan. Surprisingly, fluorescence data reveal the appearance of intermolecular hydrophobic aggregates both in chitosan and in HM chitosan. Nevertheless, these polymers exhibit quite different rheological properties: upon the formation of aggregates the viscosity of HM chitosan sharply increases, while that of unmodified chitosan raises only slightly. The aggregation models for both chitosan and its hydrophobic derivative were proposed. It was shown that in solutions of HM chitosan two types of hydrophobic domains exist: hydrophobic domains typical for different associating polymers with hydrophobic side chains and hydrophobic domains inherent to chitosan itself.