From the standpoints of both basic research and biotechnology, there is considerable interest in reaching a clearer understanding of the diversity of biological mechanisms employed during lignocellulose degradation. Globally, termites are an extremely successful group of wood-degrading organisms and are therefore important both for their roles in carbon turnover in the environment and as potential sources of biochemical catalysts for efforts aimed at converting wood into biofuels. Only recently have data supported any direct role for the symbiotic bacteria in the gut of the termite in cellulose and xylan hydrolysis. Here we use a metagenomic analysis of the bacterial community resident in the hindgut paunch of a wood-feeding 'higher' Nasutitermes species (which do not contain cellulose-fermenting protozoa) to show the presence of a large, diverse set of bacterial genes for cellulose and xylan hydrolysis. Many of these genes were expressed in vivo or had cellulase activity in vitro, and further analyses implicate spirochete and fibrobacter species in gut lignocellulose degradation. New insights into other important symbiotic functions including H2 metabolism, CO2-reductive acetogenesis and N2 fixation are also provided by this first system-wide gene analysis of a microbial community specialized towards plant lignocellulose degradation. Our results underscore how complex even a 1-microl environment can be.