Chitosan is a natural polycationic linear polysaccharide derived from chitin. The low solubility of chitosan in neutral and alkaline solution limits its application. Nevertheless, chemical modification into composites or hydrogels brings to it new functional properties for different applications. Chitosans are recognized as versatile biomaterials because of their non-toxicity, low allergenicity, biocompatibility and biodegradability. This review presents the recent research, trends and prospects in chitosan. Some special pharmaceutical and biomedical applications are also highlighted.