Chitosans, partially de-N-acetylated derivatives of chitin, are multifunctional biopolymers. In nature, biological activities of partially acetylated chitosan polymers are mediated in part by their oligomeric breakdown products, which are generated in situ by the action of chitosanolytic enzymes. Understanding chitosanolytic enzymes, therefore, can lead to the production of chitosan oligomers with fully defined structures that may confer specific bioactivities. To address whether defined oligomer products can be produced via chitosanolytic enzymes, we here characterized a GH8 family chitosanase from Bacillus spec. MN, determining its mode of action and product profiles. We found that the enzyme has higher activity towards polymers with lower degree of acetylation. Oligomeric products were dominated by GlcN3, GlcN3GlcNAc1, and GlcN4GlcNAc1. The product distribution from oligomers were GlcN3 > GlcN2. Modeling and simulations show that the binding site comprises subsites ranging from (−3) to (+3), and a putative (+4) subsite, with defined preferences for GlcN or GlcNAc at each subsite. Flexible loops at the binding site facilitate enzyme-substrate interactions and form a cleft at the active site which can open and close. The detailed insight gained here will help to engineer enzyme variants to produce tailored chitosan oligomers with defined structures that can then be used to probe their specific biological activities.