Among the methods used for the hydrolysis of chitosan, enzymatic hydrolysis using chitosanase was selected in order to produce high yield of specific chitooligosaccharides with less environmental pollutions. The production of Dothideomycetes sp. NRC-SSW extracellular chitosanase was statistically optimized in which a two - phase experimental design were applied. Plackett – Burman design was used to evaluate the relative importance of culture conditions and medium components for chitosanase production. Chitosan concentration, agitation speed and incubation period were found to be the most significant variables that affected the chitosanase production and their optimal values were obtained by applying Box-Behnken design. The optimized medium composed of (g/L) chitosan, 30; K2HPO4, 1.5; MgSO4, 0.4; KCl, 4.0; yeast extract, 18.5 and FeSO4,0.01; at pH 5.5, 30°C and 180rpm for 96h gave 13.9U/mL with 36.3% increase in the activity. The R2 value was 0.954 and this indicated the aptness of the model. The optimization of the hydrolytic conditions required for chitooligosaccharides production was also performed by Box-Behnken design. The highest yield of chitooligosaccharides was obtained with enzyme/ substrate ratio 0.05U/mg in 0.2M Tris HCl buffer incubation at 60οC for 5h. The cytotoxic activity of the chitooligosaccharides was tested in vitro against Hep-G2 and MCF7.