A thermostable Chitinase Chi1 from Myceliophthora thermophila C1 was homologously produced and characterized. Chitinase Chi1 shows high thermostability at 40 °C (>140 h 90% activity), 50 °C (>168 h 90% activity), and 55 °C (half-life 48 h). Chitinase Chi1 has broad substrate specificity and converts chitin, chitosan, modified chitosan, and chitin oligosaccharides. The activity of Chitinase Chi1 is strongly affected by the degree of deacetylation (DDA), molecular weight (Mw), and side chain modification of chitosan. Chitinase Chi1 releases mainly (GlcNAc)2 from insoluble chitin and chitooligosaccharides with a polymerization degree (DP) ranging from 2 to 12 from chitosan, in a processive way. Chitinase Chi1 shows higher activity toward chitin oligosaccharides (GlcNAc)4−6 than toward (GlcNAc)3 and is inactive for (GlcNAc)2. During hydrolysis, oligosaccharides bind at subsites −2 to +2 in the enzyme’s active site. Chitinase Chi1 can be used for chitin valorisation and for production of chitin- and chito-oligosaccharides at industrial scale.