The aim of this study was to evaluate the chitin degradation potential and whole-genome sequence of Streptomyces diastaticus strain CS1801, which had been screened out in our previous work. The results of fermentation revealed that CS1801 can convert the chitin derived from crab shells, colloidal chitin and N-acetylglucosamine to chitooligosaccharide. Additional genome-wide analysis of CS1801 was also performed to explore the genomic basis for chitin degradation. The results showed that CS1801 possesses a chromosome with 5,611,479 bp (73% GC) and a plasmid with 1,388,284 bp (73% GC). The CS1801 genome consists of 7584 protein-coding genes, 90 tRNA and 21 rRNA operons. In addition, the results of genomic CAZyme analysis indicated that CS1801 comprises 103 glycoside hydrolase family genes, which could regulate the glycoside hydrolases that contribute to chitin degradation. The whole-genome information of CS1801 could highlight the mechanism underlying the chitin degradation activity of CS1801, strongly indicating that CS1801 is characterized by a substantial number of genes encoding chitinases and the complete metabolic pathway of chitin, conferring CS1801 with promising potential applicability in chitooligosaccharide production.