Chitosan is an unique natural biopolymer that has great potential in tissue engineering applications and over the past several decades, it has emerged as a promising biomaterial for biomedical applications. Due to its various properties such as controllable biodegradability, biocompatibility, antimicrobial activity and functionalizability, chitosan can be used to form chitosan-based scaffolds and in different scaffold fabrication techniques. Over the years a great number of studies have been performed to evaluate the cytocompatibility of chitosan using a variety off cell types such as osteoblasts, chondrocytes, fibroblasts, nucleus pulposus cells, neutral and endothelial cells. It was shown that chitosan is biocompatible with these cell types and has the potential to be used for bone, cartilage, skin, intervertebral disc, ligament and tendon, and nerve and vascular tissue engineering. The flexibility of the processing conditions of chitosan aids in the fabrication of versatile substrates as scaffolds for tissue regeneration or carriers for biological molecules. It is critical to synthesize medical grade chitosan materials with controllable structure and properties that will allow the development of chitosan-based medical devices and it is beneficial to chemically design chitosan derivatives with molecular and biological specificity through bulk material modification. Despite all the challenges, chitosan holds great promise as a biomaterial for developing medical products and medical therapies.