Chitin and chitosan are the second most abundant natural biopolymers in the curst of the earth. These polysaccharide biopolymers have a long linear chain-like structure connected with β-d glucosidic linkage with the functionalizable surface groups. Because of the structural features, these biomaterials exhibit unique physical, chemical, mechanical and optical properties, which contributed to the tunable and outstanding properties such as low density, high porosity, renewability, natural biodegradability, and environmental friendliness, etc. Chitin was synthesized via mechanical, chemical, chemo-mechanical, and eco-friendly biological methods and the deacetylation of the synthesized chitin carried for the preparation of chitosan. With the chemical modification used for the preparation of chitosan, there occurs some minor change in characteristics; however, most of the properties were relatable due to major similarities in the microstructures. The inherent antibacterial, non-toxic, and biodegradable properties with the ease of processibility of both polymer has the potential to become a successful alternative to its synthetic counterparts for energy and environmental applications. However, the poor mechanical and thermal properties in comparison to the conventional alternatives have restricted its widespread applications. This review addresses various areas such as extraction techniques of chitin and synthesis of chitosan, discussion of the common characteristics of both polymers together such as crystallinity, thermal properties, mechanical properties, hydrophilicity, and surface charge. Moreover, this review paper also addresses the common functionalization techniques for both polymer and the use of both unmodified chitin and chitosan along with their derivatives in environmental and energy applications such as air pollution, heavy metal adsorption, dye adsorption, biosensors, EMI shielding, fuel cell, solar cell, lithium-ion batteries, and biofuels.