Chitosan (CS) derivatives are widely used in various biomedical applications due to their unique properties like biocompatibility, mucoadhesion, non-toxicity and capability to form gels. Furthermore, they are suitable candidates to manufacture films, tablets and nanotechnology-based systems which have the possibility for commercial production as well as industrial scale-up. CS has a low solubility at physiological pH (>6.0), thus limiting its application in systems needing higher solubility and drug release rate. Another drawback of CS is its fast water adsorption and high swelling degree in aqueous media, which can cause rapid drug release. Chemical modification of two hydroxyl and one amino groups existing on the CS chains using the carboxymethyl moieties will alter the CS properties. The water solubility of carboxymethyl chitosan (CMC) at various pH environments is governed by the carboxymethylation degree. The CMC derivatives can interact with cells which successfully result in cell growth/tissue regeneration and wound healing. They are also employed in the cosmetics production because of their moisture absorption-retention, antimicrobial and emulsion stabilizing characteristics. This work will highlight the most recent applications of CMC derivatives with antimicrobial, anticancer, antitumor, antioxidant and antifungal biological activities in various areas like wound healing, tissue engineering, drug/enzyme delivery, bioimaging and cosmetics.