Michigan State University Extension
Preserving Food Safely - 01600663
To shell chestnuts, make two crosscut gashes on their flat side with a sharp pointed knife. The outer shell may come off when you do this, but the inner skin will still protect the kernel. To remove both the inner and outer coverings, place the nuts in a pan over high heat, dropping oil or butter over them - 1 teaspoon to 1 pound of nuts. Shake them until coated, then place moderate oven until the shells and inner brown skin can be easily removed. This brown inside skin is bitter and must be peeled off while still warm.
Cut a cross on flat sides of nuts. Spread in a shallow pan; add 1/4 cup water. Bake at 450 degrees Fahrenheit for 15 minutes or until shells open. With a sharp knife, peel while hot. The inner brown skin is bitter and must be removed while warm.