Water streams are contaminated with highly hazardous materials released from industries. Various purification techniques are in practice for remediating the contaminated water. Among them, membrane technology has received tremendous importance in recent years. In the present work novel ultrafiltration membranes were prepared by blending a biopolymer chitosan, with cellulose acetate and polyethylene glycol in N,Nl– dimethylformamide by phase inversion technique. The membranes were prepared in different ratios and subjected to characterization using Fourier Transform Infrared Spectroscopy (FTIR), X-ray Diffraction analysis (XRD) and Scanning Electron Microscopy (SEM). Structural changes during formation of blends were confirmed by FTIR. The molecular packing of the prepared polymer blends was identified using XRD. Surface morphology and crosssection of membranes were analyzed using SEM. Water absorption capacity and the percentage rejection of chromium from industrial and artificial wastewater were carried out. It was found that the blend with highest PEG content showed maximum rejection of 48.46% and 54.96% in both artificial wastewater and industrial wastewater which was in good agreement with % hydrophillicity and SEM and the results were discussed.