Potato chip processing waste of trimmed potato, potato peel and substandard (low-quality) potato chips, obtained from a potato chip processing plant, were used as substrates for chitosan production from Rhizopus oryzae. It was cultured on each waste product at 30 +/- A 2A degrees C and 70% moisture content for 21 days. Fermented potato peel had the highest yield after 5 days of fermentation. The cultivation condition of chitosan obtained from R. oryzae was optimum for a peel size of less than 6 mesh, 70% moisture content and a pH of 5. Furthermore, the best extraction condition was using 46% sodium hydroxide at 46A degrees C for 13 h followed by 2% acetic acid at 95A degrees C for 8 h. The maximum chitosan yield obtained by these conditions was 10.8 g/kg substrate. Fungal chitosan properties were found to be 86-90% degree of deacetylation, molecular weight of 80-128 kDa and viscosity of 3.1-6.1 mPa s. Therefore, potato peel could be applied as a low cost substrate for chitosan production from R. oryzae.