Chitosan is a partially deacetylated polymer of N-acetyl glucosamine. It is essentially a natural, water-soluble, derivative of cellulose with unique properties. Chitosan is usually prepared from chitin (2 acetamido-2-deoxy beta-1,4-D-glucan) and chitin has been found in a wide range of natural sources (crustaceans, fungi, insects, annelids, molluscs, coelenterata etc.) However chitosan is only manufactured from crustaceans (crab and crayfish) primarily because a large amount of the crustacean exoskeleton is available as a by product of food processing. Squid pens (a waste byproduct of New Zealand squid processing) are a novel, renewable source of chitin and chitosan. Squid pens are currently regarded as waste and so the raw material is relatively cheap. This study was intended to assess the functional properties of squid pen chitosan. Chitosan was extracted from squid pens and assessed for composition, rheology, flocculation, film formation and antimicrobial properties. Crustacean chitosans were also assessed for comparison. Squid chitosan was colourless, had a low ash content and had significantly improved thickening and suspending properties. The flocculation capacity of squid chitosan was low in comparison with the crustacean sourced chitosans. However it should be possible to increase the flocculation capacity of squid pen chitosan by decreasing the degree of acetylation. Films made with squid chitosan were more elastic than crustacean chitosan with improved functional properties. This high quality chitosan could prove particularly suitable for medical/analytical applications.