Chitosan is a unique biopolymer in the respect that it is abundant, cationic, low-toxic, non-immunogenic and biodegradable. The relative occurrence of the two monomeric building units (N-acetyl-glucosamine and d-glucosamine) is crucial to whether chitosan is predominantly an ampholyte or predominantly a polyelectrolyte at acidic pH-values. The chemical composition is not only crucial to its surface activity properties, but also to whether and why chitosan can undergo a sol–gel transition. This review gives an overview of chitosan hydrogels and their biomedical applications, e.g., in tissue engineering and drug delivery, as well as the chitosan’s surface activity and its role in emulsion formation, stabilization and destabilization. Previously unpublished original data where chitosan acts as an emulsifier and flocculant are presented and discussed, showing that highly-acetylated chitosans can act both as an emulsifier and as a flocculant.