Production of extracellular xylanase from Bacillus sp. GRE7 using a bench-top bioreactor and solidstate fermentation (SSF) was attempted. SSF using wheat bran as substrate and submerged cultivation using oat-spelt xylan as substrate resulted in an enzyme productivity of 3,950 IU g À1 bran and 180 IU ml À1 , respectively. The purified enzyme had an apparent molecular weight of 42 kDa and showed optimum activity at 70°C and pH 7. The enzyme was stable at 60-80°C at pH 7 and pH 5-11 at 37°C. Metal ions Mn 2+ and Co 2+ increased activity by twofold, while Cu 2+ and Fe 2+ reduced activity by fivefold as compared to the control. At 60°C and pH 6, the K m for oat-spelt xylan was 2.23 mg ml À1 and V max was 296.8 IU mg À1 protein. In the enzymatic prebleaching of eucalyptus Kraft pulp, the release of chromophores, formation of reducing sugars and brightness was higher while the Kappa number was lower than the control with increased enzyme dosage at 30% reduction of the original chlorine dioxide usage. The thermostability, alkali-tolerance, negligible presence of cellulolytic activity, ability to improve brightness and capacity to reduce chlorine dioxide usage demonstrates the high potential of the enzyme for application in the biobleaching of Kraft pulp.