We investigate the structure of chiral nematic phases formed by colloidal suspensions of (alpha-chitin rodlike particles in aqueous media. At sufficiently high volume fraction, owing to the particles anisotropic shape, a liquid-crystal phase appears that remarkably mimics the cholesteric geometry observed in biological tissues such as crustacean exoskeletons. The aim of the present work is to describe the structure of chitin colloidal dispersions and the chiral properties of the nematic phase. Both the pH and ionic strength affect the concentrations in the isotropic (C-I) and chiral nematic (C-N) phases at coexistence. The contribution of the crystallites to the ionic strength is evidenced by the linear variation of C, and CN with overall chitin volume fraction. When the ionic strength of the solution reaches about 10(-2) M, the system does not phase separate in bulk anymore; birefringent droplets form throughout the sample but do not coalesce or sediment. SAXS patterns of shear-aligned samples prove the cholesteric nature of the anisotropic phase, previously inferred from optical observations. The liquidlike positional local order, revealed by the presence of broad interference peaks at low angle, is stronger at lower ionic strength. The azimuthal profiles of these patterns allowed us to determine the value of S approximate to 0.8 of the nematic order parameter at the transition. The cholesteric pitch (P-0) in the biphasic domain of the diagram ranges from 27.5 +/- 3.5 mum to 140 +/-17 mum depending on the composition of the suspension medium. The variation of PO has been studied as a function of the concentration of crystalline rods in the coexistence domain. Shear-aligned samples were gelled by UV-induced polymerization of acrylamide precursors added to the dispersion medium, thus freezing the alignment. The nematic nature of the gelled samples and their strong shear-induced alignment are confirmed by SAXS.