Hydrogels are three‐dimensional (3D) crosslinked hydrophilic polymer networks that have garnered tremendous interests in many fields, including water treatment, energy storage, and regenerative medicine. However, conventional synthetic polymer hydrogels have poor biocompatibility. In this context, polysaccharides, a class of renewable natural materials with biocompatible and biodegradable properties, have been utilized as building blocks to yield polysaccharide‐based hydrogels through physical and/or chemical crosslinking of polysaccharides via a variety of monomers or ions. These polysaccharide‐derived hydrogels exhibit peculiar physicochemical properties and excellent mechanical properties due to their unique structures and abundant functional groups. This review focuses on recent advances in synthesis and applications of polysaccharide‐based hydrogels by capitalizing on a set of biocompatible and biodegradable polysaccharides (i.e., cellulose, alginate, chitosan, and cyclodextrins [CDs]). First, we introduce the design and synthesis principles for crafting polysaccharide‐based hydrogels. Second, polysaccharide‐based hydrogels that are interconnected via various crosslinking strategies (e.g., physical crosslinking, chemical crosslinking, and double networking) are summarized. In particular, the introduction of noncovalent and/or dynamic covalent interactions imparts polysaccharide‐based hydrogels with a myriad of intriguing performances (e.g., stimuli–response and self‐recovery). Third, the diverse applications of polysaccharide‐based hydrogels in self‐healing, sensory, supercapacitor, battery, drug delivery, wound healing, tissues engineering, and bioimaging fields are discussed. Finally, the perspectives of polysaccharide‐based hydrogels that promote their future design to enable new functions and applications are outlined.