The objective of this chapter is to present fundamental factors (e.g. intrinsic and extrinsic) influencing chitosan as antimicrobial agent, for effective practical application. The antimicrobial activity of chitosan is well observed on a wide variety of micro-organisms including fungi, algae and some bacteria. However, the antimicrobial action is influenced by intrinsic and extrinsic factors such as the type of chitosan (e.g. plain or derivative); degree of chitosan polymerization; host natural nutrient constituency; substrate chemical and/or nutrient composition; and environmental conditions (e.g. substrate water activity (Aw) and/or moisture). Although both plain and derivative chitosans are effective as antimicrobial agents, there is a differential effect between them. Their differential antimicrobial effect is mainly exhibited in live host plants; thus the antifungal effect of N-carboxymethyl chitosan (NCMC) is different in vegetable as compared with graminea host. At the same time, pentamer and heptamer chitosan units seem to have better antifungal action than larger units. Chitosan antimicrobial action is more immediate on fungi and algae, followed by bacteria; the chitosan site of action is at the microbial cell wall.