An uncommon thermophilic fungus, Melanocarpus albomyces, was isolated from soil and compost by incubating samples in a glucose/sorbose/asparagine liquid medium, followed by enrichment culture in medium containing sugarcane bagasse as carbon source. The culture filtrate protein of the fungus grown in the presence of bagasse or xylose hydrolysed xylan and some other polysaccharides but cellulose was not hydrolysed. High extracellular xylanase (EC 3 . 2 . 1 .8) activity was produced by cultures grown on xylose or hemicellulosic materials. The enzyme was induced in glucose-grown washed mycelia in response to addition of xylose or xylan but not by alkyl or aryl P-D-xylosides. Cultures produced higher enzyme yields in shaken flasks than in a fermenter. Gel-filtration chromatography of culture filtrate protein showed the presence of two isoenzymes of xylanase, whose relative proportions varied with the carbon source used for growth. The extent of hydrolysis of heteroxylans or the hemicellulosic fraction of bagasse by culture filtrate protein preparations was greater when the cultures had been grown on bagasse rather than xylose as the inducing substrate. The activity of xylanase preparations was increased when an exogenous P-glucosidase was added.