Chitosan is prepared from prawn shell using the bio-conversion methods as compared with the chemical treatment method. The physicochemical properties, molecular weight, degree of deacetylation, ash content as well as yield of prepared chitosan indicate that bioconversion is a good and sustainable method for the isolation of chitosan. Chitin deacetylase, the enzyme that catalyzes the hydrolysis of acetamido groups of N-acetyl glucosamine in chitin, has been purified to homogeneity from the bacteria Bacillus altitudinus and further characterized. Chitin deacetylase is active on several chitinous substrates and chitin derivatives. The enzyme is inhibited by 1mM Hg2,Fe2+, but addition of Mn2+ slightly increases chitinase activity. When colloidal chitin (a chitin derivative) was used as substrate, the optimum temperature and pH for enzyme activity was determined. The surface morphology of treated chitosan and the enzyme s apparent molecular mass was determined by Scanning Electron Microscope (SEM) and Sodium Dodecyl Sulfate Poly Acrylamide Gel Electrophoresis (SDSPAGE) respectively.