Recently, microbial prodigiosin (PG) has received much attention due to its numerous beneficial applications. The aim of this study was to establish the bioprocessing of marine chitinous wastes (MCWs) for the cost-effective preparation of PG. Of the MCWs, demineralized shrimp shell powders (de-SSP) were found to be a potential source of carbon/nitrogen (C/N) for PG production by bacterial fermentation using Serratia marcescens strains. Further, PG scale-up production was investigated in a 15 L bioreactor system, and the highest yield (6200 mg/L) was achieved during fermentation using 5 L of a novel-designed culture broth that included 1.60% C/N sources (a de-SSP/casein ratio of 7/3), 0.02% K2SO4, and 0.05% K2HPO4, with an initial pH of 6–7. Fermentation was conducted in the dark at 27.5 °C for 8.0 h. This study was the first to report on the utilization of shrimp wastes for cost-effective, large-scale (5 L/pilot) PG production with high productivity (6200 mg/L) in a short cultivation time. The combination of 0.02% K2SO4 and 0.05% K2HPO4 was also found to be a novel salt composition that significantly enhanced PG yield. The red compound was purified and confirmed as PG after analyzing its HPLC profile, mass, and UV/vis spectra. The purified PG was then tested for its bioactivities and showed effective anticancer activities, moderated antioxidant activities, and novel anti-NO effects.