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BACKGROUND Astaxanthin (ASTA) is a kind of food‐derived active ingredient (FDAI) with antioxidant and antidiabetic functions. It is nontoxic but its poor solubility and low bioavailability hinder its application in the food industry. In this study, a novel carrier, polyethylene glycol‐grafted chitosan (PEG‐g‐CS) was applied to enhance the bioavailability of astaxanthin. It encapsulated astaxanthin completely by solvent evaporation to manufacture astaxanthin using poly (ethylene glycol)‐graft‐chitosan nanoparticles (ASTA‐PEG‐g‐CS) nanoparticles to improve absorption. RESULTS: The ASTA‐PEG‐g‐CS nanoparticles were spherical, with a particle size below 200 nm and a ζ potential of about −26 mV. Polyethylene glycol‐grafted chitosan can encapsulate astaxanthin well, and the encapsulated astaxanthin was released rapidly – in 15 min in an in vitro release study. In a rat single‐pass intestinal perfusion study, a low concentration of ASTA‐PEG‐g‐CS nanoparticle (0.2 μg mL−1) was better absorbed in the intestine. In particular, the jejunum could absorb most astaxanthin without a change in the concentration. An in vivo release study also demonstrated that ASTA‐PEG‐g‐CS nanoparticles enhanced oral bioavailability significantly. CONCLUSION: This novel carrier, PEG‐g‐CS, provided a simple way to encapsulate food, which improved the bioavailability of hydrophobic ingredients. © 2021 Society of Chemical Industry. [ABSTRACT FROM AUTHOR]