Polysaccharides are composed of many monosaccharide units that are joined one to the other by acetyl linkage to give a long chain. Chitin is a biopolymer consisting of acetyl-glucosamine. Chitosan is a linear polysaccharide consisting of B- (1, 4)-2-amino-2-deoxy-D-glucopyranose units. It is produced by alkaline deacetylation of chitin. Today, Chitin and chitosan have many applications in the biomedical, pharmaceutical and biotechnological fields. Chitosan production from microbial origin has many advantages over traditional productions from crustaceans shells since it avoids limited and seasonal supply, processing complexity and waste removal difficulties. Currently, industrial production for chitin and chitosan is from the shell wastes. The objective of this study was to evaluate the feasibility of chitin and chitosan from fungal sources. Fungal chitosan was applied as a cotton fabric finishing agent using pad-dry-cure method. The topographical structure of chitosan-treated fabrics was much improved compared with control fabrics.