This report describes a facile process for separating chitin and simultaneous synthesis of carbon nanodots (CNDs) from shellfish waste using 333.3 mol/m3 (2 wt %) aqueous urea solution under hydrothermal conditions (at 150 °C for 1 h). In this process, urea functions as a denaturant and base precursor for the hydrolysis of proteins that are linked with chitin by the glycosidic ester bond. The hydrolyzed proteins in turn were used as a nitrogen-rich carbon source for synthesis of CNDs in the same pot. Additionally, this report describes a method for recovery of minerals from crab shell waste by gradient separation. The recovery of calcium carbonate in addition to chitin results in the reduction of acid consumption in the demineralization of crab shell and reduction in the evolution of carbon dioxide, a greenhouse gas. Transmission electron microscopy analysis on CNDs demonstrates the formation of quasi-spherical nanodots of size 7 to 15 nm. Solid-state NMR, Fourier transform infrared, inductively coupled plasma optical emission, and solid-state UV-visible absorption spectroscopic analyses, powder X-ray diffraction, scanning electron microscopy, and thermogravimetric analysis studies as well as CHNS elemental analysis, confirm that better quality chitin is separated by this method in comparison to the chemical method that is widely used. © 2018 American Chemical Society.