Pestalotiopsis westerdijkii, a cellulolytic mold, exhibited the production of a freely diffusing, extra-cellular enzyme capable of solubilizing hydrocellulose and amorphous cellulose when grown on coconut flour-solka-floc (2:1) medium at 31°c for 11 days. For the first time, the pH and temperature optimum for the maximum activity of the enzyme was established. The potency of the enzyme increased by serial culturing of the mold on the same medium. Activation of enzyme by cysteine hydrochloride was observed. Five-fold increases in specific activity with the elimination of most of the non-enzymic nitrogen was achieved by (NH₄)₂SO₄ precipitation and gel filtration of the crude enzyme. The enzyme treatment of coconut flour brought marked improvement in protein extractability with a corresponding decrease in crude fiber. This action of the enzyme was further established by the increase of water-soluble reducing sugars in the enzyme-treated milk due to the degradation of structural polysaccharides. The amino acid composition or the control residue predicted ample room for possible improvement of the amino acid pattern in the enzyme-treated milk. The most limiting amino acids in the coconut milk preparation is lysine in confirmation of Butterworth and Fox (4), and Thomas and Scott (41) 1 followed by threonine, the sulfur amino acids and isoleucine. Significant amounts of threonine and isoleucine were stripped out of the control residue by the enzyme treatment, and the order of limitation became lysine, the sulfur amino acids, isoleucine and lastly, threonine. The animal feeding experiments did not show any significant difference between the protein qualities of the control and enzyme-treated milk preparations; however, the animals on the residue diets all lost weight. Those which were on enzyme-treated residue did very poorly. Low digestibility of the enzyme-treated residue reflected by the restricted protein intake due to high fiber content, and the presence of the sub-optimal levels of essential amino acids compared to the control residue resulted in great loss in weight, bloated appearance and loss of balance at the end of the experimental period. The enzyme appears to be nontoxic. The enzyme at its optimal pH and temperature solubilized hydrocellulose yielding oligosaccharides with an average degree of polymerization of eleven. Also, the enzyme was more capable of handling cellobiose through cellohexaose than the higher oligosaccharides to form glucose. The wide substrate specificity exhibited by the enzyme resulted in extensive degradation of pieces of Whatman No. 1 filter paper and certain vegetable foodstuffs. / Ph. D.