Chitosan is a natural polymer which can be derived from chitin by deacetylation process. Chitin is naturally found in the shells of fish, prawn, shrimp etc. which are being generated regularly as waste from fish industries as well as from household garbage that not only effects the environment but also human health. It can also be extracted from bacteria and fungi by an enzyme called chitosanases present within the species. Chitosan has many applications in pharmaceutical, agricultural, food and water industry. Production of chitosan by these sources are not only cheap but can also reduce the environmental problems to some extent. Also chitosan and its derivatives are proposed to have antimicrobial activity This study provides an overview about a variety of sources that has been used for chitosan production and its applications with antibacterial activity.