Screening for cellulase-producing microorganisms is routinely done on carboxymethylcellulose (CMC) plates. The culture plates are flooded either with 1% hexadecyltrimethyl ammonium bromide or with 0.1% Congo red followed by 1 M NaCl. In both cases, it takes a minimum of 30 to 40 minutes to obtain the zone of hydrolysis after flooding, and the hydrolyzed area is not sharply discernible. An improved method is reported herein for the detection of extracellular cellulase production by microorganisms by way of plate assay. In this method, CMC plates were flooded with Gram's iodine instead of the reagents just mentioned. Gram's iodine formed a bluish-black complex with cellulose but not with hydrolyzed cellulose, giving a sharp and distinct zone around the cellulase-producing microbial colonies within 3 to 5 minutes. The new method is rapid and efficient; therefore, it can be easily performed for screening large numbers of microbial cultures of both bacteria and fungi. This is the first report on the use of Gram's iodine for the detection of cellulase production by microorganisms using plate assay.