Xanthan gum (XG) is an exopolysaccharide synthesized by the aerobic fermentation of simple sugars using Xanthomonas bacteria. It comprises a cellulosic backbone with a trisaccharide side chain connected to alternative glucose residues in the main backbone through α (1→3) linkage. XG dissolves readily in cold and hot water to produce a viscous solution that behaves like a pseudoplastic fluid. It shows excellent resistance to enzymatic degradation and great stability throughout a broad temperature, pH, or salt concentration range. Additionally, XG is nontoxic, biocompatible, and biodegradable, making it a suitable carrier for drug delivery. Furthermore, the carboxylic functions of pyruvate and glucuronic acid offer a considerable opportunity for chemical modification to meet the desired criteria for a specific application. Therefore, XG or its derivatives in conjunction with other polymers have frequently been studied as matrices for tablets, nanoparticles, microparticles, and hydrogels. This review primarily focuses on the applications of XG in various oral delivery systems over the past decade, including sustained-release formulations, gastroretentive dosage forms, and colon-targeted drug delivery. Source, production methods, and physicochemical properties relevant to drug delivery applications of XG have also been discussed.