In this study flake chitin, crab shell chitin, mushroom stalk, fungal cell wall, wheat bran and rice bran were used as substrate for chitinase production by Enterobacter sp. NRG4 under submerged and solid state fermentation (SSF) conditions. Enterobacter sp. NRG4 produced 72 and 49.7 U/ml of chitinase in presence of cell walls of Candida albicans and Fusarium moniliforme in submerged fermentation. Under SSF, maximum chitinase production was 965 U/g solid substrate with flake chitin and wheat bran (1:3 ratio) at 75% moisture level after 144 h. The purified chitinase inhibited hyphal extension of Fusarium moniliforme, Aspergillus niger, Mucor rouxi and Rhizopus nigricans. The chitinase was effective in release of protoplasts from Trichoderma ressei, Pleurotus florida, Agaricus bisporus and Aspergillus niger. Protoplasts yield was maximum with 60 mg of 24 h old fungal mycelium incubated with 60 U of chitinase and 60 U of cellulase.