As a green and effective technique in the production of a large number of valuable products, the microbial conversion of chitinous fishery wastes is receiving much attention. In this study, protease production using the TKU032 strain was conducted on culture media containing several common types of chitinous fishery by-products serving as the carbon and nitrogen (C/N) nutrition source. Among the chitinous wastes, 1.5% (w/v) shrimp head powder (SHP) was found to be the most appropriate nutritional source for protease production when a maximal enzyme activity of 3.14 ± 0.1 U/mL was observed on the 3rd day of the culture period. The molecular mass of TKU032 protease was estimated to be nearly 32 kDa by the polyacrylamide gel electrophoresis method. The residual SHP obtained from the culture medium was also considered to be utilized for chitin extraction. The deproteinization rate of the fermentation was estimated to be 45%, and the chitin obtained from fermented SHP (fSHP) displayed a similar characteristic Fourier-transform infrared spectroscopy (FTIR) profile as that from SHP. In addition, SHP, fSHP, and chitins obtained from SHP and fSHP were investigated for their adsorptive capacity of nine types of dyes, and chitin obtained from fSHP displayed a good adsorption rate on Congo Red and Red No. 7, at 99% and 97%, respectively. In short, the results provide potential support for the utilization of SHP in the production of TKU032 protease via the fermentation as well as the preparation of chitin from fSHP as an effective dye adsorbent.