The effect of Phanerochaete chrysosporium cellobiose oxidase (CBO) on microcrystalline cellulose hydrolysis by Trichoderma cellulases was determined. Addition of 10 micrograms.ml-1 CBO to a reaction mixture containing T. viride cellulase increased glucose and cellobiose production by 10% and 48%, respectively. Cellulose weight loss was also enhanced by 19%. At higher concentrations (20-80 micrograms.ml-1), CBO decreased glucose and cellobiose production. Cellulose weight loss at 60 micrograms.ml-1 CBO was 76% compared to control cellulase reactions. This decrease appears to be due to inactivation of cellulase by H2O2 produced via CBO reaction, because addition of catalase enhances sugar production and cellulose weight loss. These findings suggest that at low, perhaps physiologically relevant concentrations, CBO enhances crystalline cellulose degradation by cellulases.