In a medium containing cellulose as the carbon source, the rapid growth of Sporotrichum thermophile, the secretion of cellulases and the utilization of cellulose were well-correlated events. The production of β-glucosidase in culture medium lagged behind cellulases, coinciding with the time of extensive autolysis of mycelia. By contrast, neither apparent autolysis nor secretion of β-glucosidase occurred when S. thermophile was grown in medium containing cellobiose; the enzyme activity remained associated with mycelia. The release of β-glucosidase in cellulose-grown cultures was correlated with the activity of the lytic enzyme in the cell wall. Immunocytochemical localization and biochemical characterization showed that a β-glucosidase released in the cellulose medium was the same as that which remained associated with mycelia grown on cellobiose. The results indicated that the release of β-glucosidase in the cellulose culture is incidental to the activity of the lytic enzymes which are strongly induced by cellulose. The observations minimize a functional role of the culture fluid P-glucosidase in cellulolysis by the fungus. Rather, the available information suggests that the cellulases and β-glucosidases associated with the hyphal cell wall may play a role in cellulolysis by the fungus.