Chitosan, a hydrophilic biopolymer, is obtained industrially by hydrolysing the aminoacetyl groups of chitin. It is a natural, non-toxic, biodegradable polysaccharide available as solution, flake, fine powder, bead and fibre. The sources, biochemical aspects, structure and chemical modification, physico-chemical and functional properties, and applications of chitosan have been investigated extensively in the literature. In this paper, the attractive properties and broad applications of chitosan-based microparticles, their versatile properties, different preparation methods, and pharmaceutical and biopharmaceutical applications are reviewed.