Shrimp waste, extraction of protein hydrolysate active compounds from the waste and using them as useful marketable products is a smart solution here which would minimize the pollution problem and at the same time maximize the profits of the processors. Although part of the waste which mainly consists of exoskeleton and cephalothorax is traditionally used for chitin/chitosan preparation, feed manufacture and manure, and a major portion remains unused or underutilized. Only 65% of the shrimp is edible. The remainder is discarded as inedible waste (Cephalothorax and exoskeleton) over the years; techniques have been developed for the exploitation and recovery of these byproducts in valuable biopolymers. About 35-45% by weight of shrimp raw material is discarded. This can generate an unpalatable high salt content product. Enzymatic hydrolysis of proteins is an attractive means of producing better functional and nutritional properties in food proteins generated from by-product The current trend of changing food preference / habit is giving importance to the food industry highlighting the need like protein designing, food engineering and tailor made proteins. In fish processing sector, highly prized fish proteins include mainly the shrimp waste proteins.