Chitosan (CS), a linear polysaccharide derived from the deacetylation of chitin, has emerged as a highly versatile and eco-friendly biomaterial. Notably, the CS market is projected to grow at a revenue-based CAGR of 25.90 between 2024 and 2032, driven by its exceptional physicochemical characteristics, including biodegradability, biocompatibility, non-toxicity, and functional group reactivity. This review provides a comprehensive evaluation of CS sources (crustaceans, insects, and fungi), extraction methods (chemical and enzymatic), and key physicochemical properties (molecular weight, degree of deacetylation, solubility, and structural polymorphism). Additionally, the discussion extends to critical structural features such as the presence of reactive amino and hydroxyl groups and their correlation with properties like thermal stability, chelation, mucoadhesiveness, and drug-carrying capability. Various chemical modifications, including acylation, quaternization, and carboxylation, are explored to enhance CS solubility and biological performance. Moreover, this review highlights the diverse biomedical applications of CS in areas such as tissue engineering, drug and gene delivery, wound healing, cancer therapy, mucoadhesive systems, antimicrobial treatments, gene delivery, and vaccines and vaccine adjuvants positioning it as a key biomaterial for next-generation therapeutic formulations. By addressing current research gaps and recent technological advancements, this review offers valuable interdisciplinary insights and serves as a foundational resource for future biomedical innovations. © 2025 Elsevier B.V., All rights reserved.