A heat-stable enzyme was isolated from the cellulase complex of a thermophilic strain of the micromycete Thielavia terrestris. The purified enzyme exhibited both endoglucanase and xylanase activities and had a mol mass of 69,000 Daltons and an isoelectric point of 6.4. When the cells were grown at 48 degrees C, the initial activity of the purified enzyme using carboxymethylcellulose as a substrate was 150 nkat/mg apd the Michaelis constant was 6.6 g/L. The heat stability of the enzyme was high, losing only 20% of the initial activity after a 6-h incubation at 65 degrees C. When cultures were grown on microcrystalline cellulose and xylose was added after 48 h of growth, endoglucanase and xylanase activities were more than doubled. Similar increases in these activities were observed by growing the cultures on straw.