<p>Global higher consumption of water resources, accompanied by increased wastewater discharge, has led to widespread water contamination and a decline in Earth's freshwater reserves. Hence, cost-effective, efficient, and environmentally friendly treatment methods are needed to obtain contaminant-free water for reuse. Chitosan, an amino polysaccharide derived from renewable sources, has recently gained prominence as a crucial component in the synthesis of hydrogels with potential and practical applications in wastewater treatment. The biodegradable and biocompatible nature, along with the chemical multifunctionality, of chitosan make it an ideal substrate for producing nature-friendly hydrogel adsorbents, provided their cons, such as mechanical weakness, easy deterioration in aqueous media, and limited regeneration capacity, are overcome. Chitosan-based hydrogels are formed by various chemical and physical modifications on chitosan, including crosslinking, grafting, blending, and interpenetration with other polymers. This review highlights recent advancements in chitosan-based hydrogels for wastewater treatment, focusing on improved adsorption capabilities, multifunctional hydrogels, and enhanced regeneration potential, and identifies areas for further research in this field. The article presents the background leading to the development of new, advanced chitosan hydrogel adsorbents, based on the fundamentals of chitosan hydrogel synthesis. It provides a comprehensive account of the mechanisms of heavy metal and dye adsorption by chitosan hydrogels. It examines the potential of advanced chitosan-based hydrogels to tackle the global pollution problem by assessing their capacities, efficiencies, regenerative abilities, as well as their weaknesses for selected pollutant removal from contaminated waters.</p>