Conventional bone grafting procedures used to treat bone defects have several limitations. An important aspect of bone tissue engineering is developing novel bone substitute biomaterials for bone grafts to repair orthopedic defects. Considerable attention has been given to chitosan, a natural biopolymer primarily extracted from crustacean shells, which offers desirable characteristics, such as being biocompatible, biodegradable, and osteoconductive. This review presents an overview of the chitosan-based biomaterials for bone tissue engineering (BTE). It covers the basic knowledge of chitosan in terms of biomaterials, the traditional and novel strategies of the chitosan scaffold fabrication process, and their advantages and disadvantages. Furthermore, this paper integrates the relevant contributions in giving a brief insight into the recent research development of chitosan-based scaffolds and their limitations in BTE. The last part of the review discusses the next-generation smart chitosan-based scaffold and current applications in regenerative dentistry and future directions in the field of mineralized tissue regeneration.