Chitin deacetylase (CDA; EC 3.5.1.41) catalyzes the hydrolysis of N-acetamide bonds of chitin, converting it to chitosan. Chitosan has several applications in areas such as biomedicine, food ingredients, cosmetics, pharmaceuticals, and agriculture. In this paper, occurrence, assay and purification protocols, enzymatic characteristics, substrate specificity, and mode of action of microbial CDAs have been described. Several lines of evidence have substantiated the biological roles involved in cell wall formation and plant-pathogen interactions for fungal CDAs. The gene structure of CDAs has been compared with other family 4 carbohydrate esterases which deacetylate a wide variety of acetylated poly/oligo-saccharides. The use of CDAs for the conversion of chitin to chitosan, in contrast to the presently used chemical procedure, offers the possibility of a controlled, non-degradable process, resulting in the production of well-defined chitosan oligomers and polymers. Insect pathogen that can secrete high levels of chitin-metab­olizing enzymes including CDA can be a possible alternative for new pest management tools.