Spinal cord injury (SCI) is one of the most complicated nervous system injuries with challenging treatment and recovery. Regenerative biomaterials such as chitosan are being reported for their wide use in filling the cavities, deliver curative drugs, and also provide adsorption sites for transplanted stem cells. Biomaterial scaffolds utilizing chitosan have shown certain therapeutic effects on spinal cord injury repair with some limitations. Chitosan-based delivery in stem cell transplantation is another strategy that has shown decent success. Stem cells can be directed to differentiate into neurons or glia in vitro. Stem cell-based therapy, biopolymer chitosan delivery strategies, and scaffold-based therapeutic strategies have been advancing as a combinatorial approach for spinal cord injury repair. In this review, we summarize the recent progress in the treatment strategies of SCI due to the use of bioactivity of chitosan-based drug delivery systems. An emphasis on the role of chitosan in neural regeneration has also been highlighted.