Chitin and its deacetylated derivative chitosan are natural polymers composed of randomly distributed β-(1-4)- linked D-glucosamine (deacetylated unit) and N-acetyl-D-glucosamine (acetylated unit). Chitin is insoluble in aqueous media while chitosan is soluble in acidic conditions due to the free protonable amino groups present in the D-glucosamine units. Due to their natural origin, both chitin and chitosan can not be defined as a unique chemical structure but as a family of polymers which present a high variability in their chemical and physical properties. This variability is related not only to the origin of the samples but also to their method of preparation. Chitin and chitosan are used in fields as different as food, biomedicine and agriculture, among others. The success of chitin and chitosan in each of these specific applications is directly related to deep research into their physicochemical properties. In recent years, several reviews covering different aspects of the applications of chitin and chitosan have been published. However, these reviews have not taken into account the key role of the physicochemical properties of chitin and chitosan in their possible applications. The aim of this review is to highlight the relationship between the physicochemical properties of the polymers and their behaviour. A functional characterization of chitin and chitosan regarding some biological properties and some specific applications (drug delivery, tissue engineering, functional food, food preservative, biocatalyst immobilization, wastewater treatment, molecular imprinting and metal nanocomposites) is presented. The molecular mechanism of the biological properties such as biocompatibility, mucoadhesion, permeation enhancing effect, anticholesterolemic, and antimicrobial has been updated.