Carboxymethyl chitosan (CMCS) hydrogels have been investigated in biomedical research because of their versatile properties that make them suitable for various medical applications. Key properties that are especially valuable for biomedical use include biocompatibility, tailored solid-like mechanical characteristics, biodegradability, antibacterial activity, moisture retention, and pH stimuli-sensitive swelling. These features offer advantages such as enhanced healing, promotion of granulation tissue formation, and facilitation of neutrophil migration. As a result, CMCS hydrogels are favorable materials for applications in biopharmaceuticals, drug delivery systems, wound healing, tissue engineering, and more. Understanding the interactions between CMCS hydrogels and biological systems, with a focus on their influence on cellular behavior, is crucial for leveraging their versatility. Because of the constantly growing interest in chitosan and its derivative hydrogels in biomedical research and applications, the present review aims to provide updated insights into the potential medical applications of CMCS based on recent findings. Additionally, we comprehensively elucidated the cellular mechanisms underlying the actions of these hydrogels in medical settings. In summary, this paper recapitulates valuable data gathered from the current literature, offering perspectives for further development and utilization of carboxymethyl hydrogels in various medical contexts.