Chondroitin sulfate (CS)-Keel disaccharide (CSD) was produced by chondroitin AC lyase (PsPL8A) degradation of food grade CS-Keel polysaccharide isolated from chicken keel cartilage. PsPL8A showed specific activity, 340 ± 5.2 U mg⁻¹ with CS-Keel polysaccharide. TLC showed CSD as the major product. CSD was purified by gel filtration and MS/MS, confirms it as C4S disaccharide. Structural characterization by FTIR and NMR showed presence of N-acetylgalactosamine and glucuronic acid. CSD displayed resistance to gastric juice with 23.7% hydrolysis at pH 1.0. CSD showed prebiotic score of 0.57 for L. acidophilus and 0.58 for B. infantis and produce SCFA products. MTT and morphological analysis confirmed, CSD (0.5 mg mL⁻¹) does not decrease viability of mouse fibroblast (L929), but showed anti-proliferative potential against human colon cancer (HT-29) cell lines (80% inhibition). CSD treated HT-29 cells exhibit nuclear fragmentation and apoptosis. Prebiotic and anticancer potential of CSD can be utilized for functional food preparation and prevention of gastrointestinal disorders.