Myrothecium verrucaria produced high levels of chitinases in a medium containing chitin used as a sole carbon source. Adding 0.03% urea increased the enzyme yield 4-fold in 7 days compared to the control. Adding oxgall (0.1%) to the growth medium gave the maximum activity (acid-swollen chitin-degrading activity, 2.0IU/ml) in 7 days. The biochemical characterization of the chitinase revealed its broader temperature (25-55°C) and pH (4.0-6.5) profiles of activity which showed its potential application in fungal mycelia degradation. Compared to commercial lytic enzyme preparations (NovoZym 234 and Onozuka R-10), M, verrucaria culture filtrate had 5-6 times more chitinase activity. And this produced significantly higher levels of N-acetyl-D-glucosamine from the fungal mycelia preparations under study.