Chitosan, a natural biopolymer with excellent biocompatibility, biodegradability, and modifiable structure, has broad applications in regenerative medicine, tissue engineering, food packaging, and environmental technology. Its abundance, solubility in acidic solutions, and capacity for chemical modification make it highly adaptable for creating specialized derivatives with enhanced properties. Recent advances have demonstrated chitosan’s efficacy in composite systems for tissue regeneration, drug delivery, and antimicrobial applications. This review examines chitosan’s unique properties, with a focus on its antibacterial activity as influenced by factors like pH, concentration, molecular weight, and deacetylation degree. Additionally, chitosan’s potential as a sustainable, non-toxic material for eco-friendly packaging and water treatment is explored, highlighting the growing interest in chitosan composites with other polymers and metallic nanoparticles for enhanced biomedical and environmental applications.