Commercial chitosan manufacturing process relies on strong chemical treatment on chitin that generates chitosan with undesirable properties and leads to environmental pollution. To overcome the adverse consequences, enzymatic chitosan preparation from chitin was undertaken in the current study. A potent chitin deacetylase (CDA) producing bacterial strain was screened and subsequently identified as Alcaligens faecalis CS4. After optimization 40.69 U/mL of CDA production was achieved. By treating the organically extracted chitin with partially purified CDA chitosan yield of 19.04 % was attained having 71 % solubility, 74.9 % degree of deacetylation, 21.16 % crystallinity index, 246.4 kDa molecular weight and 298 °C highest-decomposition temperature. FTIR and XRD analysis revealed characteristics peaks respectively within 870-3425 cm wavenumber and 10°-20°, for enzymatically and chemically extracted (commercial) chitosan that endorses their structural similarity which validated through electron microscopic study. At 10 mg/mL chitosan concentration 65.49 % DPPH radical scavenging activity endorsed its antioxidant potential. Minimum inhibitory concentration of chitosan was 0.675, 1.75, 0.33 and 0.75 mg/mL for Streptococcus mutans, Enterococcus faecalis, Escherichia coli and Vibrio sp., respectively. Mucoadhesiveness and cholesterol binding properties were also exhibited by extracted chitosan. The present study opens a new vista for eco-friendly extraction of chitosan from chitin that is proficient and sustainable in environmental perspective.