This article is from the misc.writing Writing FAQ, by Wendy Chatley Green email@example.com with numerous contributions by others.
It depends. Although chapters of a standard length
(4,000 words, say) may be easier to outline, plan, count,
and edit, there are no rules on chapter length. It is easy
to find huge novels divided into 20 or fewer chapters and
very slim novels with 45 or more divisions.
When to end a chapter and begin another one is one
of the factors of story-telling. Sometimes a chapter closes
where a story would end: following a brief cooldown after a
crisis resolution. This gives a feeling of accomplishment
for the reader and a sense of intermission.
Sometimes the chapters close before the resolution
of a crisis, or after the introduction of the next crisis.
These chapter breaks give a sense of suspense--that events
are crowding in on the reader.
Sometimes chapters are kept consistent in length to
establish a rhythm. Sometimes chapters vary greatly in
length, giving the reader a sense of a kaleidoscopic world.
Other time, chapters end and begin with a change in Point Of
View, the scene's setting in time or space, or at a radical
change in mood.
All depends on what suits the needs of your story.