The limitations associated with the conventional treatment of cancer have necessitated the design and development of novel drug delivery systems based mainly on nanotechnology. These novel drug delivery systems include various kinds of nanoparticles, such as polymeric nanoparticles, solid lipid nanoparticles, nanostructured lipid carriers, hydrogels, and polymeric micelles. Among the various kinds of novel drug delivery systems, chitosan-based nanoparticles have attracted the attention of researchers to treat cancer. Chitosan is a polycationic polymer generated from chitin with various characteristics such as biocompatibility, biodegradability, non-toxicity, and mucoadhesiveness, making it an ideal polymer to fabricate drug delivery systems. However, chitosan is poorly soluble in water and soluble in acidic aqueous solutions. Furthermore, owing to the presence of reactive amino groups, chitosan can be chemically modified to improve its physiochemical properties. Chitosan and its modified derivatives can be employed to fabricate nanoparticles, which are used most frequently in the pharmaceutical sector due to their possession of various characteristics such as nanosize, appropriate pharmacokinetic and pharmacodynamic properties, non-immunogenicity, improved stability, and improved drug loading capacity. Furthermore, it is capable of delivering nucleic acids, chemotherapeutic medicines, and bioactives using modified chitosan. Chitosan and its modified derivative-based nanoparticles can be targeted to specific cancer sites via active and passive mechanisms. Based on chitosan drug delivery systems, many anticancer drugs now have better effectiveness, potency, cytotoxicity, or biocompatibility. The characteristics of chitosan and its chemically tailored derivatives, as well as their use in cancer therapy, will be examined in this review.