Various properties of chitosan can be customized by thiolation for very specific needs in a wide range of application areas. Since the discovery of thiolated chitosans, many studies have proven their advantageous characteristics, such as adhesion to biological surfaces, adjustable cross-linking and swelling behavior, controllable drug release, permeation as well as cellular uptake enhancement, inhibition of efflux pumps and enzymes, complexation of metal ions, antioxidative properties, and radical scavenging activity. Simultaneously, these polymers remain biodegradable without increased toxicity. Within this Review, an overview about the different possibilities to covalently attach sulfhydryl ligands to the polymeric backbone of chitosan is given, and the resulting versatile physiochemical properties are discussed in detail. Furthermore, the broad spectrum of applications for thiolated chitosans in science and industry, ranging from their most advanced use in pharmaceutical and medical science over wastewater treatment to the impregnation of textiles, is addressed.