<p>Since biopolymers are so ecologically benign, sustainable, and biocompatible, they have emerged as a significant class of polymers in the field of polymer sciences, especially for a variety of biological applications. In aqueous acidic circumstances, Chitosan (CS) is generated when 50% of the 1, 4-glycosidic-linked d-glucosamine and N-acetyl-d-glucosamine units are deacetylated with different molecular weights (Mw), acetylation patterns (PA), and degrees of deacetylation (DD). Because of its remarkable chemical and biological properties, Chitosan nanoparticles (CNPs) have gained significant importance in a range of pharmaceutical and biomedical applications, such as drug delivery, gene transport, tissue engineering, biosensing, etc. CS can be utilized in applications where the sensor may come into touch with biological materials or living tissues because it is non-toxic and biocompatible. The manuscript reviews the newer studies of Chitosan-based nanoparticles (CNPs) in the form of hydrogels, micelles, nanospheres, selenium nanoparticles, etc. In order to improve overall analytical performance, this review paper highlights the production and recent applications, current state, and challenges of CS-derived nanoparticles in the fields of drug delivery for treating different types of cancers, diabetes management, anti-microbial activity, and moreover for biosensing of blood lactate, histamine, and glucose.</p> Graphical Abstract <p>Preparation and applications of Chitosan-based nanoparticles in drug delivery and biosensing.</p> <p></p>