Despite their importance to global economies, the aquaculture and seafood sectors are major contributors to waste, which is a problem for the environment. Because of its biocompatibility and recyclability, fish waste, which is rich in chitin and chitosan—holds potential in several fields. The shells of crustaceans are the source of chitin and chitosan, two substances with versatile and useful qualities. Although it is not very soluble, chitin is very biocompatible and biodegradable, much like cellulose. The more versatile and solubilized chitosan is made when chitin is deacetylated. About half of seafood waste is made up of cephalothoraxes and shrimp exoskeletons, and chitin is the second most common polysaccharide in the world. An eco‐friendly strategy for managing seafood waste and creating value may be found in investigating these compounds originating from the ocean. The byproduct of fish scales, chitosan, has many uses in the cosmetics, pharmaceutical, culinary, and aquaculture industries. Greener ways of chitin extraction include enzymatic deproteinization and microbial fermentations, as well as biological approaches like demineralization and deproteinization. Chitosan has several potential uses in biomedicine, food technology, and tissue engineering because of its acid solubility and precipitation at pH values greater than 6.0. It may be used in wound healing, water treatment, and agriculture due to its biocompatibility, biodegradability, and antibacterial qualities. Research on chitosan supplementation in several fish species suggests that it may improve immune responses. However, further research is needed to properly comprehend this. Oral chitosan use has the potential to lead to a more efficient and environmentally friendly aquaculture industry.