Export of processed and frozen shrimp products is the backbone of seafood industries. But, shrimp processing industries give rise to a large amount of waste materials. These waste products generate serious pollution hazards. A wise method to minimize environmental threats from prawn processing waste is to convert them in to useful products. Shrimp shell waste can be economically converted to chitin, a mucopolysaccharide. This marine polysaccharide and its derivatives hold a major part in our lives as medicines, cosmetics, textiles, paper, food and other branches of industry because of their unique nature in properties such as low toxicity, biocompatibility, hydrophobicity, etc. Hydrolysis of chitin yields a value added product, Glucosamine. Carboxymethylchitin is another derivative of chitin, prepared by the carboxymethylation reaction. This review article is an attempt to give an idea about the preparation, properties, and applications of the derivatives of chitin viz., glucosamine and carboxymethylchitin. (C) 2007 Wiley Periodicals, Inc.