Peptides are signaling epitopes that control many vital biological events. Increased specificity, synthetic feasibility with concomitant lack of toxicity, and immunogenicity make this emerging class of biomolecules suitable for different applications including therapeutics, diagnostics, and biomedical engineering. Further, chitosan, a naturally occurring linear polymer composed of d-glucosamine and N-acetyl-d-glucosamine units, possesses anti-microbial, muco-adhesive, and hemostatic properties along with excellent biocompatibility. As a result, chitosan finds application in drug/gene delivery, tissue engineering, and bioimaging. Despite these applications, chitosan demonstrates limited cell adhesion and lacks biosignaling. Therefore, peptide-chitosan hybrids have emerged as a new class of biomaterial with improved biosignaling properties and cell adhesion properties. As a result, recent studies encompass increased application of peptide-chitosan hybrids as composites or conjugates in drug delivery, cell therapy, and tissue engineering and as anti-microbial material. This review discusses the recent investigations involving chitosan-peptide materials and uncovers various aspects of these interesting hybrid materials for biomedical applications.