We have shown that a xylan-degrading bacterium, W-61, excretes multiple xylanases, including xylanase 5 with a molecular mass of 140 kDa. Here, we emend the previously used classification of the bacterium (i.e., Aeromonas caviae W-61) to Paenibacillus sp. strain W-61 on the basis of the nucleotide sequence of the 16S rRNA gene, and we clone and express the xyn5 gene encoding xylanase 5 (Xyn5) in Escherichia coli and study the subcellular localization of Xyn5. xyn5 encodes 1,326 amino acid residues, including a 27-amino-acid signal sequence. Sequence analysis indicated that Xyn5 comprises two family 22 carbohydrate-binding modules (CBM), a family 10 catalytic domain of glycosyl hydrolases, a family 9 CBM, a domain similar to the lysine-rich region of Clostridium thermocellum SdbA, and three S-layer-homologous (SLH) domains. Recombinant Xyn5 bound to a crystalline cellulose, Avicel PH-101, while an N-terminal 90-kDa fragment of Xyn5, which lacks the C-terminal half of the family 9 CBM, did not bind to Avicel PH-101. Xyn5 was cell bound, and the cell-bound protein was digested by exogenous trypsin to produce immunoreactive and xylanolytic fragments with molecular masses of 80 and 60 kDa. Xyn5 was exclusively distributed in the cell envelope fraction consisting of a peptidoglycan-containing layer and an associated S layer. Thus, Paenibacillus sp. strain W-61 Xyn5 is a cell surface-anchored modular xylanase possessing a functional cellulose-binding module and SLH domains. Possible cooperative action of multiple xylanases produced by strain W-61 is discussed on the basis of the modular structure of Xyn5.