In recent years, bone tissue engineering (BTE), as a multidisciplinary field, has shown considerable promise in replacing traditional treatment modalities (i.e., autografts, allografts, and xenografts). Since bone is such a complex and dynamic structure, the construction of bone tissue composite materials has become an attractive strategy to guide bone growth and regeneration. Chitosan and its derivatives have been promising vehicles for BTE owing to their unique physical and chemical properties. With intrinsic physicochemical characteristics and closeness to the extracellular matrix of bones, chitosan-based composite scaffolds have been proved to be a promising candidate for providing successful bone regeneration and defect repair capacity. Advances in chitosan-based scaffolds for BTE have produced efficient and efficacious bio-properties via material structural design and different modifications. Efforts have been put into the modification of chitosan to overcome its limitations, including insolubility in water, faster depolymerization in the body, and blood incompatibility. Herein, we discuss the various modification methods of chitosan that expand its fields of application, which would pave the way for future applied research in biomedical innovation and regenerative medicine.