A bacterial isolate showing a strong endochitosanase activity was isolated from soil and then characterized. The isolate was identified and designated as Bacillus cereus P16, based on morphological and biochemical properties, assimilation tests, cellular fatty acids pattern, along with 16S rRNA gene sequence. The optimized medium for producing extracellular chitosanase in a batch culture contained 1% tryptone, 0.5% chitosan, and 1% NaCl (pH 7.0). Powder chitosan and tryptone served the best as carbon and nitrogen sources, respectively, for the chitosanase production. Chitosanase activity was the highest when culture was completed at $37^{circ}C$ among various temperatures ($20-42^{circ}C$) tested in a shaking incubator (200 rpm). The levels of chitosanase activity in the culture fluid were 2.0 U/ml and 3.8 U/ml, respectively, when incubated in a flask for 60 h and in a jar fermenter for 24 h. The culture supernatant showed a strong liquefying activity on the soluble chitosan. The viscosity of 1% chitosan solution, that was incubated with the culture supernatant, was rapidly decreased, suggesting the secretion of endochitosanolytic enzymes by P16. The culture fluid revealed six endo-type chitosanase isozymes, two major (38 and 45 kD), and four minor (54, 65, 82, and 96 kD) forms by staining profile. The crude enzymes were very stable, and full activity was maintained for 4 weeks at $4^{circ}C;or;-20^{circ}C$ in the culture supernatant, suggesting a highly desirable stability rate for making an industrial application of the crude enzymes. The supernatant also cleaved the insoluble chitosan powder, but the hydrolysis rate was much lower. The enzymic degradation products of chitosan contained $(GlcN)_n$ (n=2-8). The concentration of chitosan in the reaction mixture of the crude enzyme affected the chitooligosaccharides composition of the hydrolysis products. When the higher concentration of chitosan was used, the higher degree of polymerized chitooligosaccharides were produced. By comparison with other commercial chitosanase preparations, P16 was indeed found to be a valuable enzyme source for industrial production of chitooligosaccharides from chitosan.