Chitosan is a cationic biopolymer that is derived from chitin by the alkaline deacetylation technique. It has randomly distributed d-glucosamine and N-Acetyl-d-glucosamine units in its backbone. Due to the presence of primary hydroxyl and amino groups, chitosan can be modified into various derivatives with desired functionalities. Chitosan and its derivatives are considered as potential biomaterials to be utilized in various biological applications because of their easy availability, nontoxicity, biocompatibility, biodegradability, and gelling properties. This chapter provides a detailed review on the current status and challenges of using chitosan-based materials as biosensors, food coatings, drug delivery carriers, antimicrobial agents, wound dressings, hemostatic agents, and tissue engineering scaffolds.