The cellobiose oxidizing enzyme of the newly isolated cellulolytic bacterium Cytophaga sp. LX-7 was produced extracellularly when grown on cellulose or other saccharides, which was previously noted only in fungi. The enzyme could use not only cellobiose, maltose, glucose and other saccharides but also cellulose as substrates, and use dichlorophenol indophenol and oxygen as electron accepters.