This chapter has provided an overview about how hard it is to find a perfect compound. Despite a number of beneficial accounts of chitosan, its derivatives and nanoparticles, there are some limitations associated with its widespread utilization. In this connection, the poor solubility is the prime concern. It is also difficult to control the cytotoxicity. Although CS is approved for use in diet, wound dressings applications, and formulations of cartilage, there has not been yet a single formulation of CS-based drug approved for mass-marketing reported so far. Some effective recent strategies have been adopted to deal with the current challenges and to improve the qualities. A lot of research is also needed in understanding the issues of nanoparticle technology; which may create further opportunities to translate nanomedicinal techniques into much better clinical outcomes for tumor-targeted delivery of nanoparticles. This chapter has also summarized the salient features of chitosan as an excellent biocompatible, biodegradable, and polycationic polymer, which has great structural modification ability to create new properties and purposes in diverse fields, particularly in industry and biomedical fields. Most important fundamental technological advances have been utilized to augment the capabilities and improve the qualities and consistency of CS and modified CSNPs. The properties of CSNPs have evidently revealed it as a better future development prospective in various scientific fields. It is anticipated that the challenges of this novel material will be better dealt in near future and several other areas will also be discovered where its utility will be optimized in an efficient way.