Chitosan is a biotechnological derivative of chitin receiving a widespread pharmaceutical and biomedical applications. It can be used to encapsulate and deliver cancer therapeutics with inherent pH-dependent solubility to confer drug targeting at tumour microenvironment and anti-cancer activity synergizing cancer cytotoxic drug actions. To further reduce the off-target and by-stander adverse effects of drugs, a high targeted drug delivery efficiency at the lowest possible drug doses is clinically required. The chitosan has been functionalized with covalent conjugates or complexes and processed into nanoparticles to encapsulate and control drug release, to avoid premature drug clearance, to deliver drugs passively and actively to cancer site at tissue, cell or subcellular levels, and to promote cancer cell uptake of nanoparticles through membrane permeabilization at higher specificity and scale. Nanomedicine developed using functionalized chitosan translates to significant preclinical improvements. Future challenges related to nanotoxicity, manufacturability, selection precision of conjugates and complexes as a function of cancer omics and their biological responses from administration site to cancer target need critical assessments.