Xylanase production from B. megaterium was enhanced using solid state fermentation with respect to the use of solid substrate, moistening solution, moisture content, inoculum, sugars, soyabean meal, amino acids, and extraction with surfactant. An increase of approximate to 423-fold in xylanase production and complete suppression of CMCase production was achieved over submerged liquid fermentation. Biobleaching using this cellulase-free xylanase, 8 U/g of oven dried pulp of 10% consistency, showed 8.12% and 1.16% increase in brightness and viscosity, 13.67% decrease in kappa number, and 31% decrease in chlorine consumption at the CD stage.