Polysaccharides are widely employed to fabricate hydrogels owing to their intrinsic properties including biocompatibility, biodegradability, sustainability, and easy modification. However, a considerable amount of polysaccharide‐based hydrogels are prepared by chemical crosslinking method using organic solvents or toxic crosslinkers. The presence of reaction by‐products and residual toxic substances in the obtained materials causes a potential secondary pollution risk and thus severely limits their practical applications. In contrast, polysaccharide‐based physical hydrogels are preferred over chemically derived hydrogels and can be used to address existing drawbacks of chemical hydrogels. The polysaccharide chains of such hydrogel are typically crosslinked by dynamic noncovalent bonds, and the co‐existence of multiple physical interactions stabilizes the hydrogel network. This review focuses on providing a detailed outlook for the design strategies and formation mechanisms of polysaccharide‐based physical hydrogels as well as their specific applications in tissue engineering, drug delivery, wound healing, and wastewater treatment. The main preparation principles, future challenges, and potential improvements are also outlined. It is hoped that this review can provide valuable information for the rational fabrication of polysaccharide‐based physical hydrogel. The specific research works listed in the review can provide a systematic and solid research basis for the reliable development of polysaccharide‐based physical hydrogel.