Dextranase was produced from fungus Paecilomyces lilacinus by submerged fermentation under different cultural conditions viz. pH, incubation temperature, inoculum size and days of incubation for maximum enzyme production. Maximum enzyme production was achieved at pH 6.0 of Mandel media and at temperature 30°C. Inoculum size of 1 × 10 7 spores/ml was found to be optimum for maximum enzyme production. Enzyme production increased with the increase in days of incubation from 3 to 5 days and then declined thereafter. Dextranase units (from 1 to 15 U/100 ml juice) were exogenously added to sugarcane juice with an aim to optimize dextranase application for removal of dextran from cane juice. Addition of dextranase in juice of cane variety CoS 8436, resulted in relatively less increase in dextran content as compared to control during storage. Whereas, dextran content in untreated juice increased 10 times during 24 h of storage, the increase during this period was only 2.3 times in juice treated with 15 U of dextranase. With the application of 1, 2, 5, 10 and 15 units of dextranase in 100 ml of juice, dextran content was decreased by 15.51, 30.82, 50.20, 68.20 and 73.30 % as compared to the control (with no dextranase added) after 24 h of storage. This study finds application in minimizing the dextran problem in sugar industry.