Naturally occurring polymers, particularly of the polysaccharide type, have been used pharmaceutically for the delivery of a wide variety of therapeutic agents. Chitosan, the second abundant naturally occurring polysaccharide next to cellulose, is a biocompatible and biodegradable mucoadhesive polymer that has been extensively used in the preparation of micro-as well as nanoparticles. The prepared particles have been exploited as a potential carrier for different therapeutic agents such as peptides, proteins, vaccines, DNA, and drugs for parenteral and nonparenteral administration. Therapeutic agent-loaded chitosan micro- or nanoparticles were found to be more stable, permeable, and bioactive. In this review, we are highlighting the different methods of preparation and characterization of chitosan micro- and nanoparticles, while reviewing the pharmaceutical applications of these particles in drug delivery. Moreover, the roles of chitosan derivatives and chitosan metal nanoparticles in drug delivery have been illustrated.