Diabetes mellitus is a chronic metabolic disorder. In addition to taking medication, adjusting the composition of the diet is also considered one of the effective methods to control the levels of blood glucose. Chitosan and its derivatives are natural and versatile biomaterials with health benefits. Chitosan has the potential to alleviate diabetic hyperglycemia by reducing hepatic gluconeogenesis and increasing skeletal muscle glucose uptake and utility. Scientists also focus on the glucose-lowering effect of chitosan oligosaccharide (COS). COS supplementation has the potential to alleviate abnormal glucose metabolism in diabetic rats by inhibiting gluconeogenesis and lipid peroxidation in the liver. Both high and low molecular weight chitosan feeding reduced insulin resistance by inhibiting lipid accumulation in the liver and adipose tissue and ameliorating chronic inflammation in diabetic rats. COS can reduce insulin resistance but has less ability to reduce hepatic lipids in diabetic rats. A clinical trial showed that a 3-month administration of chitosan increased insulin sensitivity and decreased body weight and triglycerides in obese patients. Chitosan and COS are considered Generally Recognized as Safe; however, they are still considered to be of safety concerns. This review highlights recent advances of chitosan and its derivatives in the glucose-lowering/antidiabetic effects and the safety.