Chitin is the most abundant natural polysaccharide and chitosan is its most important derivative. Regardless of having various bioactivities, the water insolubilities of chitin and chitosan limit their applications in many industries. The physical, chemical or enzymatic depolymerization of chitin and chitosan deliver chit-ooligosaccharides (COS): water-soluble and low molecular weight derivatives, superior to the parent polymers in multiple aspects. COS exhibit an enormously wide range of biological activities and a remarkable potential to be applied in various industries. This review has fully addressed the latest research on the biological activities of COS and the molecular mechanism behind these activities in a correlation with their physicochemical properties. Furthermore, an attempt has been made to report the commercially available COS products. The bioactivities discussed here may offer new understanding of the applications of COS in numerous sectors.