Strains of thermophilic bacilli were screened for cellulolytic activity by gel diffusion assay on selective medium at 55 degrees C. Strain B-41361, identified as a strain of Bacillus licheniformis, displayed activity against carboxymethylcellulose. Zymogram analysis demonstrated several catalytically active polypeptides with the most prominent species having a mass of 37 kDa. The enzyme was purified 60-fold with a 17% yield and specific activity of 183 U/mg. The amino terminal sequence was homologous to members of glycoside hydrolase family 5. Optimal temperature was 65 degrees C (measured over 30 min), but the enzyme was most stable at 60 degrees C, retaining greater than 90% activity after one hour. The enzyme had a broad pH range, with maximal activity at pH 6.0, 75% maximal activity at pH 4.5, and 40% at pH 10. The enzyme hydrolyzed p-nitrophenylcellobioside, barley beta-glucan, and lichenan, but no activity was detected against avicel or acid-swollen cellulose.