Chitinases are a group of hydrolytic enzymes that catalyze chitin, nd are synthesized by a wide variety of organisms. In nature, microbial chitinases are primarily responsible for chitin decomposition. Several chitinases have been reported and characterized, and they are garnering increasing attention for their uses in a wide range of applications. In the food industry, the direct fermentation of seafood, such as crab and shrimp shells, using chitinolytic microorganisms has contributed to increased nutritional benefits through the enhancement of chitin degradation into chitooligosaccharides. These compounds have been demonstrated to improve human health through their antitumor, antimicrobial, immunomodulatory, antioxidant, and anti-inflammatory properties. Moreover, chitinase and chitinous materials are used in the food industry for other purposes, such as the production of single-cell proteins, chitooligosaccharides, N-acetyl d-glucosamines, biocontrol, functional foods, and various medicines. The functional properties and hydrolyzed products of chitinase, however, depend upon its source and physicochemical characteristics. The present review strives to clarify these perspectives and critically discusses the advances and limitations of microbial chitinase in the further production of functional foods.