The effective chitinase enzyme reducing organisms were isolated from prawn shell dumped soil. The isolates were named as FS1 &FS2. The chitinase enzyme was produced only when the organisms was grown on medium containing the prawn shell powder. Optimizations of enzyme production (pH, temparture, substrate concentration) were carried out. In this study both FS1(46.7U/ml) FS2 (77.8U/ml) bacterial strain produced maximum chitinase at pH 7.0. maximum chitinase enzyme was obtained in 0.5% substrate concentration (140U/ml) in 96hrs by FS1 and in 0.8% in substrate concentration (93.3U/ml) in 72 hrs. This enzyme was highly used for antifungal activity.