Chaetomium globosum KM651986 was selected as the best chitosanase producing fungus. It was identified on the basis of morphological and molecular taxonomy and got the Genbank accession number KM651986. The fungus showed the highest chitosanase activity of 540.51±0.47U/gds in the wheat bran solid state fermentation medium supplemented with 1% chitosan. The important factors affecting chitosanase production were statistically optimized using Response Surface Methodology. The optimal fermentation conditions increased the chitosanase activity up to 1758.75 U/gds, an approximate 3.25-fold improvement as compared to the previous yield with un-optimized medium. Partial purification of chitosanase by using ammonium sulphate (30-70 %) precipitation showed high yield 72.73% and purification fold 4.2. The partially purified enzyme was optimally active at pH 5.0 acetate buffer and temperature at 50°C. The enzyme presented moderate thermal stability. The Km and Vmax of chitosanase were calculated to be 0.24 mg/ml and 40μmol/min, respectively. The activity of chitosanase was markedly enhanced by Na+2, Mn2+, mercaptoethanol and EDTA and slightly inhibited by Fe3+, K+, Ag+ and Ba2+. The crude enzyme was used to hydrolyze the soluble chitosan and the TLC result showed that the chitosan oligosaccharides obtained from the hydrolysis mainly dimers to hexamers. The obtained chitosan oligosaccharides showed valuable biological applications as antioxidant and antimicrobial activities. This is the first report on the statistical optimization and characterization of Chaetomium globosum KM651986 chitosanase enzyme and its applications for chitosan oligosaccharides.