Dynamic hydrogel systems from N,O‐carboxymethyl chitosan (NOCC) are investigated in the past years, which has facilitated their widespread use in many biomedical engineering applications. However, the influence of the polymer's oxidation levels on the hydrogel biological properties is not fully investigated. In this study, chitosan is converted into NOCC and introduced to react spontaneously with oxidized xanthan gum (OXG) to form several injectable hydrogels with controlled degradability. Different oxidation levels of xanthan gum, as well as NOCC/OXG volume ratios, are trialed. The infrared spectroscopy spectra verify chemical modification on OXG and successful crosslinking. With increasing oxidation levels, more dialdehyde groups are introduced into the OXG, resulting in changes in physical properties including gelation, swelling, and self‐healing efficiency. Under different volume ratios, the hydrogel shows a stable structure and rigidity with higher mechanical properties, and a slower degradation rate. The shear‐thinning and self‐healing properties of the hydrogels are confirmed. In vitro assays with L929 cells show the biocompatibility of all formulations although the use of a high amount of OXG15 and OXG25 limited the cell proliferation capacity. Findings in this study suggested a suitable amount of OXG at different oxidation levels in NOCC hydrogel systems for tissue engineering applications. The relationships between polymer modifications to the hydrogel's biological properties are essential to understand in developing a new hydrogel product. This work studies a hydrogel system consideration of the component's oxidation levels for potential use in tissue engineering applications. At different oxidation levels, hydrogels owned their characteristic properties. This suggests a suitable amount of oxidized xanthan gum used in hydrogels.