Cellulase activity is due to the activity of multiple enzymes, including endoglucanases, cellobiohydrolases and glucosidases that work synergistically to solubilize crystalline cellulose efficiently. The dependence of hydrolysis reaction rate on temperature predicts that large increases in performance and decreased enzyme cost would be achieved if the enzymatic degradation could be operated at elevated temperatures. However there is always a tradeoff between the activity and stability of enzymes. So obtaining cellulases with high thermostability and simultaneously enhanced activity is a great challenge in the field of bioethanol production. In the studies presented in this dissertation, different computational techniques, such as Molecular Dynamics (MD), Molecular Docking, Quantum Mechanics (QM) and hybrid Quantum Mechanics and Molecular Mechanics (QM/MM), along with several site-directed mutagenesis and in vitro assays have been applied to the study and design of the activity and stability of cellulases. Using molecular dynamics to investigate the thermal unfolding of endoglucanases of family 5 of glycoside hydrolases (GH5), a good correlation between the optimum activity temperatures of cellulases and their structural fluctuations was revealed. These data led us to hypothesize that cellulase stability could be enhanced by redesign of enzyme dynamics through altering the amino acid composition in the highly flexible regions of an endoglucanase that would increase its local or global rigidity. Cellulase C, a GH5 member, was stabilized thermally and chemically by cross linking its highly flexible subdomain. Family 1 of glycoside hydrolases were investigated by QM and hybrid QM/MM methods to analyze the role of non-catalytic polar residues at the active site of GH1 glucosidases that make hydrogen bonds to the glucose moiety at subsite -1. A tyrosine residue in simultaneous interaction with O5 of the glucose ring and the carboxylate group of the nucleophilic glutamate was found to play a significant role in the energy profile along the hydrolysis reaction coordinates. It was shown to reduce the energy barrier of the deglycosylation step by ~12 Kcal/mol. Exclusion of this tyrosine from QM calculation substantially influenced the preactivated structure of the glucose moiety in the enzyme-substrate complex and affected the structural distortion and charge distribution in transition states. / Ph. D.