Chitosan is a natural polysaccharide that has attracted significant scientific interest during the last two decades. It is a potentially biologically compatible material that is chemically versatile (-NH2 groups and various M(w)). These two basic properties have been used by drug delivery and tissue engineering scientists to create a plethora of formulations and scaffolds that show promise in healthcare. Despite the high number of published studies, chitosan is not approved by the FDA for any product in drug delivery, and as a consequence very few biotech companies are using this material. This review will aim to provide information on these biological properties that affect chitosan's safe use in drug delivery. The term "Chitosan" represents a large group of structurally different chemical entities that may show different biodistribution, biodegradation and toxicological profiles. Here we aim to review research in this area and critically discuss chitosan's potential to be used as a generally regarded as safe (GRAS) material.