Controlling excessive water production in oil and gas wells is still a challenge needing to be addressed, especially via advanced polymer gel technologies. In this work, a biocompatible and naturally available polymer was employed to prepare nanocomposite hydrogels for water shut-off applications. A chitosan biopolymer was functionalized at first, and then, hydrogels were prepared by the addition of an organic cross-linker and nanoadditives of graphene-oxide (GO) and functionalized carbon nanotubes (CNTs). Grinding and mechanical sieving were then employed to prepare preformed particle gels (PPGs). The thermal stability and mechanical strength of the PPGs were assessed. The volumetric swelling ratio (SR) of the PPGs as a function of pH, salinity, and temperature was mapped using the full factorial design of experiments. Finally, a microfracture connected to a uniform matrix structure was laser-etched on glass to investigate the plugging performance and water shut-off capability of the PPGs. Results indicate that the thermal stability and mechanical strength of the PPGs are improved significantly by the addition of the nanostructures. The SR of the PPGs is found to be a function of salinity and pH, and no significant impact of the temperature is detected. The SR increases by 95% when the salinity and pH are altered from 20 000 ppm and 5.5 to 200 000 ppm and 7.5, respectively. This means that, despite a 10-fold growth in salinity, the PPGs swell up with the pH increase. The residual resistance factor, representing the plugging efficiency, increases from 956 to 1134 and 1173 by the addition of CNT and GO into the gel structure, respectively. The nanostructure surface sites bond to the polymer functional groups, leading to the construction of the gel structures resistant to salinity, temperature, and load pressure. As a conclusion, the biocompatible nanocomposite PPGs are found to be capable candidates for water shut-off applications.