Fundamental features of microbial cellulose utilization are examined at successively higher levels of aggregation encompassing the structure and composition of cellulosic biomass, taxonomic diversity, cellulase enzyme systems, molecular biology of cellulase enzymes, physiology of cellulolytic microorganisms, ecological aspects of cellulase-degrading communities, and rate-limiting factors in nature. The methodological basis for studying microbial cellulose utilization is considered relative to quantification of cells and enzymes in the presence of solid substrates as well as apparatus and analysis for cellulose-grown continuous cultures. Quantitative description of cellulose hydrolysis is addressed with respect to adsorption of cellulase enzymes, rates of enzymatic hydrolysis, bioenergetics of microbial cellulose utilization, kinetics of microbial cellulose utilization, and contrasting features compared to soluble substrate kinetics. A biological perspective on processing cellulosic biomass is presented, including features of pretreated substrates and alternative process configurations. Organism development is considered for “consolidated bioprocessing” (CBP), in which the production of cellulolytic enzymes, hydrolysis of biomass, and fermentation of resulting sugars to desired products occur in one step. Two organism development strategies for CBP are examined: (i) improve product yield and tolerance in microorganisms able to utilize cellulose, or (ii) express a heterologous system for cellulose hydrolysis and utilization in microorganisms that exhibit high product yield and tolerance. A concluding discussion identifies unresolved issues pertaining to microbial cellulose utilization, suggests approaches by which such issues might be resolved, and contrasts a microbially oriented cellulose hydrolysis paradigm to the more conventional enzymatically oriented paradigm in both fundamental and applied contexts