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Xylanase activity was found both free and bound to the cells and (or) the substrate during the first growth phase of Cellulomonas on bagasse pith. At the same time, rapid degradation of the bagasse hemicellulose was observed. The enzymes became bound mainly during the second growth phase, during which hemicellulose degradation was still detected, although at a lower rate. Intracellular xylanase activity was about one-tenth of the activity detected outside the cell during this phase. At the end of growth, 89% of the bagasse hemicellulose had been consumed.