This review gives an updated overview of the current state-of-the-art for antimicrobial chitosan and chitosan derivatives and the effects of structural modifications on activity and toxicity. The various synthetic routes introduced for chemical modification of chitosan are discussed, and the most common functional groups are highlighted. Different analytical techniques used for structural characterization of the synthesized chitosan derivatives are discussed and critically evaluated. For the purpose of this review, the antimicrobial chitosan derivatives have been classified on the basis of the type of functional group conjugated to the polymer backbone. In each case, the influence of the degree of substitution on the biological properties has been examined. Finally, we have summarized the collective information and suggested future directions for further research to improve our understanding of the bioactivity and to develop more useful chitosan conjugates.