Chitosan-based hydrogels are water-absorbing three-dimensional networks that are formed through different cross-linking mechanisms. The much-increased interest in using these hydrogels as delivering vehicles arises from their diverse physicochemical properties. The presence of hydrophilic groups like amine and hydroxyl groups contributes to its multitude of properties. The ability of these hydrogels to encapsulate, retain, and release bioactive molecules is made use in designing different drug-delivering systems across various biomedical fields. Recently, the focus has been shifted to fabricating “smart systems” that can respond to external stimuli, including light, temperature, pH, and magnetic field. Diverse molecules like genes, proteins, peptides, antibacterial, anticancer, antifungal, and anti-inflammatory drugs can be delivered using these hydrogel systems. This chapter reviews the recent progress in the fabrication and use of chitosan-based hydrogels in pharmaceutical delivery.