Polysaccharides are natural biological molecules that have numerous advantages for theranostics, the integrated approach of therapeutics and diagnostics. Their derivable reactive groups can be leveraged for functionalization with a nanoparticle-enabling conjugate, therapeutics (small molecules, proteins, peptides, photosensitizers) and/or diagnostic agents (imaging agents, sensors). In addition, polysaccharides are diverse in size and charge, biodegradable and abundant and show low toxicity in vivo. Polysaccharide-based nanoparticles are increasingly being used as platforms for simultaneous drug delivery and imaging and are therefore becoming popular theranostic nanoparticles. The review focuses on the method of nanoparticle formation (self-assembled, physical or chemical cross-linked) when engineering polysaccharide-based nanoparticles for theranostic nanomedicine. We highlight recent examples of polysaccharide-based theranostic systems from literature and their potential for use in the clinic, particularly chitosan- and hyaluronic acid-based NPs.