Chitosan, a polyaminosaccharide obtained by alkaline deacetylation of chitin, possesses useful properties including biodegradability, biocompatibility, low toxicity, and good miscibility with other polymers. It is extensively used in many applications in biology, medicine, agriculture, environmental protection, and the food and pharmaceutical industries. The amino and hydroxyl groups present in the chitosan backbone provide positions for modifications that are influenced by factors such as the molecular weight, viscosity, and type of chitosan, as well as the reaction conditions. The modification of chitosan by chemical methods is of interest because the basic chitosan skeleton is not modified and the process results in new or improved properties of the material. Among the chitosan derivatives, cyclodextrin-grafted chitosan and poly(ethylene glycol)-grafted chitosan are excellent candidates for a range of biomedical, environmental decontamination, and industrial purposes. This work discusses modifications including chitosan with attached cyclodextrin and poly(ethylene glycol), and the main applications of these chitosan derivatives in the biomedical field.