Chitosan-based nanoparticles (CNPs) are a promising area in agro-nanotechnology, providing environmentally friendly and multifunctional solutions for sustainable crop growth. Made from the deacetylation of chitin, chitosan is a biodegradable, biocompatible polymer with natural antimicrobial and plant defense–activating properties. When at the nanoscale, these properties are greatly enhanced, allowing for controlled delivery of fertilizers, pesticides, and biomolecules, as well as promoting better plant growth, stress resistance, and post-harvest shelf life. CNPs also show potential as carriers for gene delivery and smart release systems triggered by environmental cues. However, their large-scale use in agriculture faces significant hurdles, including inconsistencies in synthesis methods, issues with stability and solubility, effects that depend on concentration, and limited field testing. Environmental and ecotoxicological concerns, especially regarding persistence, bioaccumulation, and effects on non-target organisms, further hinder safe application. Moreover, the lack of standardized regulatory frameworks and high production costs limit commercial adoption. Overcoming these challenges requires interdisciplinary research to improve fabrication processes, better understand plant–nanoparticle interactions, carry out long-term environmental studies, and develop strong regulatory guidelines. With ongoing innovation and responsible use, CNPs have great potential to support resilient, resource-efficient, and climate-smart farming.