Very few direct studies have been performed on cosmetic applications of chitosan and its derivatives so far. Chitosan and its derivatives have attracted considerable attention due to their biological activities and potential applications in the medical, food, pharmaceutical, and cosmetic fields. These compounds may be potential agents in the cosmetic industry due to their physicochemical and biological activities, in addition to their characteristic bio-compatible, bio-degradable, and non-toxic natures. In this review, we focused our attention on the biotechnological application of chitosan and its derivatives derived from crustaceans in cosmetic formulations. Due to their enhanced biological activities, chitosan and its derivatives may be promising candidates for sun-screen, skin, oral, and hair care formulations.