Polysaccharide, one of the most abundant polymers in nature, is utilized in diverse industrial fields, ranging from food to medicine, owing to its unique functional features and biological activity. The increased global interest in current environmental issues, particularly in the food industry, has provoked the need for bio-based polymers as alternatives to synthetic polymers. As raw materials for food packaging, polysaccharide-based polymers have significant merits, including biodegradability, antioxidant or antimicrobial activity, flexibility, and barrier properties (ultraviolet (UV), oxygen, moisture, and carbon dioxide). Molecular modifications to overcome the difficulties in physicochemical properties and incorporate nanoparticles, plasticizers, or other natural extracts for synergetic improvement of functionality are necessary to develop the packaging technology. Recently, increasing innovations in eco-friendly packaging technologies have facilitated polysaccharides to achieve favorable characteristics replacing conventional packaging materials. This paper focuses on six polysaccharides used most widely in food packaging and describes their desirable barrier and mechanical properties, advantages/disadvantages, and strategies to surmount the intrinsic limitations of each candidate. Recent studies on functionality are also discussed.