Inulin, a natural polysaccharide, has emerged as a promising precursor for the preparation of hydrogels due to its biocompatibility, biodegradability, and structural versatility. This review provides a comprehensive overview of the recent progress in the preparation, characterization, and diverse applications of inulin-based hydrogels. Different synthesis strategies, including physical methods (thermal induction and non-thermal induction), chemical methods (free-radical polymerization and chemical crosslinking), and enzymatic approaches, are discussed in detail. The unique properties of inulin-based hydrogels, such as stimuli-responsiveness, antibacterial activity, and their potential as fat replacers, are highlighted. Special emphasis is given to their promising applications in drug delivery systems, especially for colon-targeted delivery, due to the selective degradation of inulin via colonic microflora. The ability to incorporate both hydrophilic and hydrophobic drugs further expands their therapeutic potential. In addition, the applications of inulin-based hydrogels in responsive materials, the food industry, wound dressings, and tissue engineering are discussed. While significant progress has been achieved, challenges and prospects in optimizing synthesis, improving mechanical properties, and exploring new functionalities are discussed. Overall, this review highlights the remarkable properties of inulin-based hydrogels as a promising class of biomaterials with immense potential in the biomedical, pharmaceutical, and materials science fields.