Cellulosic biomass is one of the foreseeable sustainable source of fuels and is also one of the dominating waste materials in nature resulting from human activities. Keeping in view the environmental problems like disposal of large volumes of cellulosic wastes and shortage of fossil fuel in the world, the main aim of the present investigation was to characterize and study the cellulolytic activity of the selected isolate on natural cellulosic substrates viz. finely grated vegetable peels. The cellulose degrading capacity of the isolate was confirmed by Congo red test. By the selection of efficient cellulolytic microorganisms and cost- effective operational techniques, the production of useful end products from the biodegradation of the low cost enormous stock of cellulose in nature can be very beneficial.