Over the past few decades, chitosan (CS) has gained the attention of researchers investigating newer biomaterial-based carriers for drugs in pharmaceutical and biomedical research. Combined with its nontoxic behavior, biodegradability, and biocompatibility, chitosan has found widespread applications in the fields of drug delivery, tissue engineering, and cosmetics. As a novel drug carrier, chitosan is regarded as one of the promising biomaterials in the pharmaceutical industry. The extensive use of this cationic biopolysaccharide in the delivery of therapeutic agents has brought a few limitations of chitosan into the limelight. Various chemical modifications of chitosan can minimize these limitations and improve the efficacy of chitosan as a drug carrier. The effectiveness of several chemically modified chitosan derivatives, including trimethyl chitosan, thiolated chitosan, PEGylated chitosan, and other chitosan derivatives, has been investigated by many researchers for the controlled and target specific delivery of therapeutics. The chemically modified chitosan derivatives exhibited greater importance in the current scenario on drug delivery due to their solubility in wide range of media along with their interaction with pharmaceutically active ingredients. Chitosan derivatives have also attracted attention in several biomedical fields, including wound healing, hyperthermia therapy, tissue engineering, and bioadhesives. The present review narrates the sources and common physicochemical properties of chitosan, including several important synthetic modifications to obtain chemically modified chitosans and their applications in targetspecific drug delivery, along with several biomedical applications.