With increasing scientific research, knowledge, and socioeconomic awareness, research, and industrial communities are now much more interested in biopolymers‐based composite materials with multifaceted functionalities. Biopolymers are easily obtainable, economical, non‐hazardous, and abundant. Several natural and synthetic polymers have been used to prepare hydrogels, microbeads, and microfibers for controlled drug release. Due to marvelous properties, chitosan has been widely explored for medical and pharmaceutical applications. In recent years, considerable attention has been paid to the chitosan‐based hydrogels for biomedical applications, especially for transplantation, and for improving interfacial interactions for the living tissues. Hydrogels can be synthesized by co‐polymerization, condensation, and cross‐linking. This review spotlights recent advances in physicochemical characteristics, modification strategies, and smart blended hydrogels for an array of biomedical and pharmaceutical applications. The whole discussion reveals that among all the biopolymers, chitosan is the finest carrier for biomedical applications.