We report on the bioinspired growth of gold nanoparticles (GNPs) in biocompatible hydrogels to develop plasmonic hybrid materials. The new hydrogel (CS-Sq) is prepared from chitosan and diethylsquarate and is formed via noncovalent interactions rising between the in situ formed ionic squaric acid derivatives and chitosan. Interestingly, when the hydrogel is prepared in the presence of HAuCl4, GNPs with controlled sizes between 15 and 50 nm are obtained, which are homogeneously distributed within the plasmonic hydrogels (GNPs-CS-Sq). We found that the supramolecular nature and the composition of the CS-Sq hydrogels are key for the growth process of GNPs where the squaric derivatives act as reducing agents and the chitosan hydrogel network provides nucleation points and supports the GNPs. Accordingly, the hydrogel acts as a bioinspired reactor and permits to gain certain control on the size of GNPs by adjusting the concentration of chitosan and HAuCl4. Besides the intrinsic and tunable plasmonic properties of the GNPs-CS-Sq hydrogels, it was found that the gels could be useful as heterogeneous catalysts for organic reactions. Furthermore, cell viability studies indicate that the new hydrogels exhibit suitable biocompatibility. Thus, the proposed method for obtaining GNPs-CS-Sq hydrogels has the potential for the development of a wide variety of other hybrid chitosan materials useful for catalysis, biosensing, cell culture, tissue engineering, and drug delivery applications.