The aim of this work was to produce chitosanase by fermenting from squid pen, and recover the fermented squid pen for dye removal by adsorption. One chitosanase induced from squid pen powder (SPP)-containing medium by Bacillus cereus TKU034 was purified in high purification fold (441) and high yield of activity recovery (51%) by ammonium sulfate precipitation and combined column chromatography. The SDS-PAGE results showed its molecular mass to be around 43 kDa. The TKU034 chitosanase used for the chitooligomers preparation was studied. The enzyme products revealed that the chitosanase could degrade chitosan with various degrees of polymerization, ranging from 3 to 9, as well as the chitosanase in an endolytic manner. Besides, the fermented SPP was recovered and displayed a better adsorption rate (up to 99.5%) for the disperse dyes (red, yellow, blue, and black) than the water-soluble food colorants, Allura Red AC (R40) and Tartrazine (Y4). The adsorbed R40 on the unfermented SPP and the fermented SPP was eluted by distilled water and 1 M NaOH to confirm the dye adsorption mechanism. The fermented SPP had a slightly higher adsorption capacity than the unfermented, and elution of the dye from the fermented SPP was easier than from the unfermented. The main dye adsorption mechanism of fermented SPP was physical adsorption, while the adsorption mechanism of unfermented SPP was chemical adsorption.