In light of escalating biomedical demands across diverse diseases, there arises a pressing need for the development of sophisticated biocompatible materials exhibiting augmented biological functionality. Chitosan, a cationic polyelectrolyte copolymer of natural origin, distinguishes itself through its extraordinary biological properties, positioning it as a promising starting material to develop versatile biomedical materials. Tremendous attention has been directed towards the creation of high-performance biocomposites, achieved through the strategic manipulation of chitosan’s structure or its derivative, along with the amalgamation of other biopolymers. This comprehensive review intricately explores recent advancements in chitosan-based biofunctional materials, delving into formulations involving various biopolymers including polysaccharides and proteins. It places specific emphasis on the progress in chitosan chemistry and materials development, encompassing particles, hydrogels, aerogels, membranes, films, and sponges. Also, this review critically evaluates the development and functional properties of biofunctional chitosan–biopolymer composite materials, spotlighting interactions, both dynamic covalent and noncovalent, and their pivotal roles in materials formation. These interactions may either be inherent or realized through chemical modification such as “Click” chemistry, polymer grafts, mussel-inspired chemistry, and selective oxidation. Furthermore, the text illustrates the current and potential biomedical applications of these biofunctional composite materials, spanning from wound dressing to tissue engineering (skin, bone, cartilage, and nerve), the controlled release and targeted delivery of drugs/bioactive compounds, biosensing, and 3D printing. Additionally, it addresses critical challenges within the field, posits potential solutions, and provides a forward-looking perspective on the future directions of functional biomaterials and design strategies
