Chitin is a natural polysaccharide of major importance. This biopolymer is synthesized by an enormous number of living organisms; considering the amount of chitin produced annually in the world, it is the most abundant polymer after cellulose. The most important derivative of chitin is chitosan, obtained by partial deacetylation of chitin under alkaline conditions or by enzymatic hydrolysis. Chitin and chitosan are known to have important functional activities but poor solubility makes them difficult to use in food and biomedicinal applications. Chitooligosaccharides (COS) are the degraded products of chitosan or chitin prepared by enzymatic or chemical hydrolysis of chitosan. The greater solubility and low viscosity of COS have attracted the interest of many researchers to utilize COS and their derivatives for various biomedical applications. In light of the recent interest in the biomedical applications of chitin, chitosan, and their derivatives, this review focuses on the preparation and biological activities of chitin, chitosan, COS, and their derivatives.