The hyperthermophilic archaeon Thermococcus kodakaraensis KOD1 possesses chitinase (Tk-ChiA) and exo-beta-D-glucosaminidase (Tk-GlmA) for chitin degradation; the former produces diacetylchitobiose (GlcNAc2) from chitin, and the latter hydrolyzes chitobiose (GlcN2) to glucosamine (GlcN). To identify the enzyme that physiologically links these two activities, here we focused on the deacetylase that provides the substrate for Tk-GlmA from GlcNAc2. The deacetylase could be detected in and partially purified from T. kodakaraensis cells, and the corresponding gene (Tk-dac) was identified on the genome. The deduced amino acid sequence was classified into the LmbE protein family including N-acetylglucosaminylphosphatidylinositol de-N-acetylases and 1-D-myo-inosityl-2-acetamido-2-deoxy-alpha-D-glucopyranoside deacetylase. Recombinant Tk-Dac showed deacetylase activity toward N-acetylchitooligosaccharides (GlcNAc(2-5)), and the deacetylation site was revealed to be specific at the nonreducing GlcNAc residue. The enzyme also deacetylated GlcNAc monomer. In T. kodakaraensis cells, the transcription of Tk-dac, Tk-glmA, Tk-chiA, and the clustered genes were induced by GlcNAc2, suggesting the function of this gene cluster in chitin catabolism in vivo. These results have revealed a unique chitin catabolic pathway in T. kodakaraensis, in which GlcNAc2 produced from chitin is degraded by the concerted action of Tk-Dac and Tk-GlmA. That is, GlcNAc2 is site-specifically deacetylated to GlcN-GlcNAc by Tk-Dac and then hydrolyzed to GlcN and GlcNAc by Tk-GlmA followed by a second deacetylation step of the remaining GlcNAc by Tk-Dac to form GlcN. This is the first elucidation of an archaeal chitin catabolic pathway and defines a novel mechanism for dimer processing using a combination of deacetylation and cleavage, distinct from any previously known pathway.