Developing heterogeneous catalyst using chitosan (CS) and magnetic Fe3O4 as support has been remarkably attractive due to their availability, low cost and non-toxicity. In this work, a heterogeneous catalyst (denoted as Fe3O4@CS@MS@Ag) was fabricated by the deposition of silver nanoparticles on magnetic chitosan via an easy and facile modification of its surface with methyl salicylate (MS). The catalyst was characterized using Fourier transform infrared (FTIR) spectroscopy, thermogravimetric analysis (TGA), X-ray diffractometer (XRD), scanning electron microscopy (SEM) and energy dispersive X-ray spectroscopy (EDX). To the best of our knowledge, for the first time, CS decorated Fe3O4 (Fe3O4@CS) has shown the catalytic activity for the reduction of 4-nitrophenol (4-NP) to 4-aminophenol (4-AP) in presence of NaBH4. Surface modified magnetic chitosan (Fe3O4@CS@MS) also acts as active catalyst towards the reduction of 4-NP. However, catalytic efficiency has increased fourfold when silver-nanoparticles-deposited magnetic chitosan (Fe3O4@CS@MS@Ag) used as our target catalyst. The catalyst was separated with external magnet after each cycle of catalytic reaction and reused effectively five times with almost 90% efficiency.