The present investigation deals with the isolation, screening and characterization of cellulose producing bacteria from termite gut and animal dung, as these are good source of the cellulose digesting environment. The gut bacteria produces extra or intra cellular cellulase for degradation of the cellulose. The microorganisms were isolated and characterised by evaluation of colony morphology and biochemical tests. The organisms were futher screened by Cong red agar media selection for cellulase producing organisms. The organisms (which organism) showing maximum clear zones around the colonies were selected for further studies. Total of thirteen bacterial isolates found to be positive on screening media. Furthermore, a total of eight positive isolates (G2, G3, G4, G5, S1, S3, T1, and T4) were selected for enzyme production and their respective cellulolytic activity was estimated. Enzyme assay for cellulose activity was found to be highest for CMC is S3 (EA=0.112μmol/ml/min) and for cellulose is (EA=0.078μmol/ml/min). The optimization of the isolated bacteria which as the potentiality for the production of cellulose was carried out. Results show that S3 strain was efficient organism for cellulase production with high enzyme activity which can be employed for cellulose degradation in industrial processes.