Chitin is the second-most abundant natural polymer and a waste product of the shellfish industry. We isolated more than 60 different strains of cyanobacteria and microalgae capable of using chitin as a sole source of nitrogen. Eleven axenic algal strains still retain the ability to grow on chitin and/or chitosan, and specific growth rates are comparable to rates on conventional sources of nitrogen. 16S rDNA shows that chitin utilization in phototrophs is ecologically widespread, revealing a new connection between light and the biogeochemical cycling of carbon and nitrogen. Most cyanobacterial strains in the UMPCCC (University of Montana Photosynthetic Chitin Culture Collection) fall into four clades: the Cyanobia, Leptolyngbyas, Oscillatorias, and Nodularias. Microalgal taxa in the collection fall into the Chlorophyceae, Trebouxiophyceae, Eustigmatophyceae, and Bacillariophyta, including the commercially important genera Chlorella, Chlamydomonas, Haematococcus, and Dunaliella.This work shows that Chlorophyta grown on chitin have decreased chlorophyll content, and some taxa exhibit secondary carotenogenesis, the production of orange and orange-red pigments, during the late exponential and early stationary phases. Six (eukaryotic) microalgal strains tested exhibited lipid hyperaccumulation on chitin. All showed a 1.5–5-fold increase in oil content (measured as pg of oil content per cell). Lipid hyperaccumulation and secondary carotenogenesis did not require nitrogen starvation or complex treatment of the cells. Thus, microalgal growth on chitin may provide an efficient method for the production of natural pigments and algal biofuels. Finally, we show that chitin has the potential to reduce the greenhouse gas footprint for algal biomass production, making algal biofuels and bio-products more sustainable and economical. It also opens a new avenue for algal-based wastewater treatment using an insoluble form of nitrogen. This reveals a new, renewable nitrogen source for the mass cultivation of photosynthetic biomass, turning a waste product into valuable commodities.