The study was conducted to compare the antibacterial activity of chemically deacylated chitin i.e. chitosan and chitin produced from shrimp shell (Macrobrachium rosenbergii). The antibacterial activity was tested against gram negative (Escherichia coli) bacteria, and gram positive (staphylococcus aureus) bacteria. To test the antibacterial activity we used institute of clinical laboratory standards (ICLS) approved dilution methods. The study was carried out by broth dilution method, and used turbidity estimations to determine the growth characteristics of a bacterial culture with or without chitin or chitosan. It was found that the antibacterial activity of chitosan was greater than chitin. Chitosan possess higher antibacterial activity against both types of bacteria, while chitin possess very lower activity. For staphylococcus aureus we found the average absorbance in every O.D value measured, staphylococcus aureus with chitin showed far higher absorbance than chitosan, indicates lower level of activity of chitin.The shrimp industry is now a rapidly growing industry. Along with the shrimp industry we can establish chitosan production industry.