Using fishery-processing wastes of squid pen powder (SPP) as the sole carbon and nitrogen (C/N) source, Serratia marcescens TKU011 produced prodigiosin. The culture was incubated in 50 mL of medium in an Erlenmeyer flask (250 mL) containing 1.5% SPP at 30 °C for 1 day and then changed to 25 °C for 2 more days. The culture broth had high prodigiosin (0.978 mg/mL). S. marcescens TKU011 grown under illumination conditions in a shaking culture exhibited higher prodigiosin production than when grown under dark conditions contrary to previous reports. The culture supernatant reduced surface tension of water, and the surfactant activity increased when prodigiosin production increased. In this study, the fishery-processing waste, squid pen, was used to produce prodigiosin at greater quantities than reported in other studies, and we found that the prodigiosin had a novel property of insecticidal activity. This method has the potential for developing mass production of prodigiosin.