Biological activities of chitosan oligosaccharides (COS) are well documented, and numerous reports of COS production using specific and non-specific enzymes are available. However, strategies for improving the overall yield by making it monomer free need to be developed. Continuous enzymatic production from chitosan derived from marine wastes is desirable and is cost-effective. Isolation of potential microbes showing chitosanase activity from various ecological niches, gene cloning, enzyme immobilization, and fractionation/purification of COS are some areas, where lot of work is in progress. This review covers recent measures to improve monomer-free COS production using chitosanase/non-specific enzymes and purification/fractionation of these molecules using ultrafiltration and column chromatographic techniques. Various bioprocess strategies, gene cloning for enhanced chitosanase enzyme production, and other measures for COS yield improvements have also been covered in this review. COS derivative preparation as well as COS-coated nanoparticles for efficient drug delivery are being focused in recent studies.