Chitosan (CT), a natural, cationic, chemically stable molecule, biocompatible, biodegradable, nontoxic, polysaccharide derived from the deacetylation of chitin, has very uniquely surfaced as a material of promise for drug delivery and biomedical applications. For the oral, ocular, cutaneous, pulmonary, and nose-to-brain routes, CT-coated nanoparticles (CTCNPs) have numerous advantages, consisting of improved controlled drug release, physicochemical stability, improved cell and tissue interactions, and increased bioavailability and efficacy of the active ingredient. CTCNPs have a broad range of therapeutic properties including anticancer, antiviral, antifungal, anti-inflammatory, antibacterial properties, treating neurological disorders, and other diseases. This has led to substantial research into the many potential uses of CT as a drug delivery vehicle. CT has also been employed in a wide range of biomedical processes, including bone and cartilage tissue regeneration, ocular tissue regeneration, periodontal tissue regeneration, heart tissue regeneration, and wound healing. Additionally, CT has been used in cosmeceutical, bioimaging, immunization, and gene transfer applications. CT exhibits a number of biological activities, which are the basis for its remarkable potential for use as a drug delivery vehicle, and these activities are covered in detail in this article. The alterations applied to CT to obtain the necessary properties have been described.