Chitosan, derived from the deacetylation of chitin, is an abundant natural biopolymer on earth. Chitosan and its derivatives have become promising biological materials because of their unique molecular structure and excellent biological activities. The reactive functional groups of chitosan such as the amino and hydroxyl groups play a crucial role in facilitating the synthesis of three-dimensional hydrogel. Chitosan-based hydrogels have been widely used in medical, pharmaceutical, and environmental fields for years. Nowadays, chitosan-based hydrogels have been found in a wide range of applications in the food industry such as food sensors, dye adsorbents and nutrient carriers. In this review, recently developed methods for the preparation of chitosan-based hydrogels were given, and the biological activities of chitosan-based hydrogels were systematically introduced. Additionally, the recent progress in food sensors, packaging, dye adsorbents, and nutrient carriers was discussed. Finally, the challenges and prospects for the future development of chitosan-based hydrogels were discussed.