Common critical size bone defects encountered in clinical practice often result in inadequate bone regeneration,primarily due to the extent of damage surpassing the inherent capacity of the body for self-healing. Bone tissue engineering scaffolds possess the desirable characteristics of biomimetic bone structure, simulated extracellular matrix, optimal mechanical strength, and biological functionality, rendering them the preferred option for the treatment of bone defects. Chitosan demonstrates favorable biocompatibility, plasticity, and a range of biological activities, rendering it a highly appealing material. Chitosan and its derivatives have been found to exert an impact on bone repair through their ability to modulate macrophage polarization, angiogenesis, and the delicate equilibrium of bone remodeling. However, the efficacy of pure chitosan is constrained, necessitating its combination with other bioactive substances to achieve an optimal biomimetic scaffold that is compatible with the specific bone defect site. Chitosan is commonly utilized in the field of bone repair in four different application forms: rigid scaffold, hydrogel, membranes, and microspheres. In order to enhance comprehension of the benefits and constraints associated with chitosan, this review provides a comprehensive overview of the structure and biological properties of chitosan, the molecular mechanisms by which chitosan promotes osteogenic differentiation, the diverse methods of chitosan preparation for various applications, and the impacts of chitosan when loaded with bioactive substances.