Chitosan is a biodegradable and biocompatible polysaccharide obtained by partial deacetylation of chitin. This polymer has been gaining increasing popularity due to its natural origin, favorable physicochemical properties, and multidirectional bioactivity. In agriculture, the greatest hopes are raised by the possibility of using chitosan as a biostimulant, a plant protection product, an elicitor, or an agent to increase the storage stability of plant raw materials. The most important properties of chitosan include induction of plant defense mechanisms and regulation of metabolic processes. Additionally, it has antifungal, antibacterial, antiviral, and antioxidant activity. The effectiveness of chitosan interactions is determined by its origin, deacetylation degree and acetylation pattern, molecular weight, type of chemical modifications, pH, concentration, and solubility. There is a need to conduct research on alternative sources of chitosan, extraction methods, optimization of physicochemical properties, and commercial implementation of scientific progress outcomes in this field. Moreover, studies are necessary to assess the bioactivity and toxicity of chitosan nanoparticles and chitosan conjugates with other substances and to evaluate the consequences of the large-scale use thereof. This review presents the unique properties of chitosan and its derivatives that have the greatest importance for plant production and yield quality as well as the benefits and limitations of their application.