Chitinase, an enzyme responsible for hydrolyzing chitin—a β-1,4-linked N-acetylglucosamine polymer abundant in fungal cell walls and arthropod exoskeletons—plays a pivotal role in ecosystem nutrient cycling and biocontrol. By degrading chitin, it disrupts pathogenic fungi and pests, offering an eco-friendly alternative to chemical pesticides. Its application in agriculture suppresses fungal growth, insect infestations, and nematode damage, enhancing crop yield and quality. Microbially derived chitinase, produced by bacteria, fungi, and actinomycetes, is particularly advantageous due to its high yield, scalability, and adaptability. Beyond biocontrol, it facilitates bioremediation by converting chitinous waste into bioavailable nutrients and supports industrial processes to generate valuable products like chitosan and bioactive oligosaccharides. Ecologically, chitinase influences microbial dynamics, symbiotic plant–microbe interactions, and nutrient recycling, maintaining ecosystem balance. This chapter comprehensively reviews the production, optimization, and multifaceted applications of microbially derived chitinase, emphasizing its significance in agriculture, environmental sustainability, and biotechnology.