The prospective applications of chitosan-based hydrogels (CBHs), a category of biocompatible and biodegradable materials, in biomedical disciplines such as tissue engineering, wound healing, drug delivery, and biosensing have garnered great interest. The synthesis and characterization processes used to create CBHs play a significant role in determining their characteristics and effectiveness. The qualities of CBHs might be greatly influenced by tailoring the manufacturing method to get certain traits, including porosity, swelling, mechanical strength, and bioactivity. Additionally, characterization methods aid in gaining access to the microstructures and properties of CBHs. Herein, this review provides a comprehensive assessment of the state-of-the-art with a focus on the affiliation between particular properties and domains in biomedicine. Moreover, this review highlights the beneficial properties and wide application of stimuli-responsive CBHs. The main obstacles and prospects for the future of CBH development for biomedical applications are also covered in this review.