The present invention provides a water-soluble modified HA practically used as a drug carrier and a production method thereof. The present invention provides: a water-soluble modified hyaluronic acid, the residence time in blood of which is elongated to a practical level, which is produced by introducing a substituent into the carboxy group of the glucuronic acid of hyaluronic acid or a derivative thereof, via an amide bond, at a lower limit of an introduction rate of 5 mole % or more, using a BOP condensing agent in an aprotic polar solvent; and a production method thereof. Moreover, by cross-linking the modified hyaluronic acid, the present invention provides a hyaluronic acid gel capable of extremely long drug sustained-release even at the same cross-linking functional group introduction rate as that of the conventionally known gel.