Chitin and chitosan, derived from natural sources such as crustaceans and fungi, are biopolymers that have gained considerable interest in biomedical applications due to their biocompatibility, biodegradability, and versatility. This chapter explores the therapeutic potential of sustainable chitin and chitosan derivatives, focusing on their roles in drug delivery systems, wound healing, tissue engineering, and antimicrobial applications. The inherent properties of these biopolymers enable the development of nanocomposites, which enhance their functionality by incorporating nanoparticles, such as metals and organic compounds. Their medicinal uses can be improved by further customizing these biopolymer-based nanocomposites to improve bioavailability and decrease cytotoxicity. These nanocomposites exhibit improved mechanical strength, targeted drug release profiles, and enhanced biological activities. The sustainable nature of chitin and chitosan offers an eco-friendly alternative to synthetic materials, addressing environmental concerns while providing effective therapeutic solutions. This chapter highlights recent advancements in the field and also discusses the mechanisms underlying the therapeutic effects of chitin and chitosan derivatives, along with present and future perspectives on their applications in regenerative medicine and beyond. Furthermore, chitin and chitosan’s adaptable chemical structures enable functional alterations, facilitating its incorporation into customized treatment strategies. Overall, the integration of sustainable chitin and chitosan into therapeutic platforms signifies a promising approach to developing innovative treatments that align with ecological sustainability.