In this study, the mechanical and machinability characteristics of chitosan (Cts)-filled polypropylene (PP) composites produced by injection molding method were analyzed. Uniaxial tensile, impact, hardness, and three-point flexural tests were used to observe the influence of Cts filler on the mechanical behavior of PP. For the machinability analysis of these materials, drilling experiments based on Taguchi’s L27 orthogonal array were performed using different drill qualities and machining parameters. Then, machining conditions are optimized through grey relational analysis methodology for machinability characteristics such as thrust force and surface roughness obtained from drilling tests. The results showed that tensile, flexural strength, and percentage elongation decreased while impact strength increased with adding the Cts filler to PP. Moreover, it was determined that the tensile and flexural modulus of elasticity increased significantly and there was a slight increase in hardness. Thrust forces decreased while surface roughness values increased when the Cts filler ratio and feed rate was increased. The optimal machining conditions for minimizing thrust force and surface roughness was obtained as PP/10 wt% Cts material, uncoated tungsten carbide drill, feed rate of 0.05 mm/rev, and cutting speed of 40 m/min. In this regard, PP composite reinforced by 10 wt% Cts is recommended for industrial applications in terms of both the mechanical and machinability characteristics.