In the present study, an attempt was made to utilize the distillery effluent for the production of bacterial cellulose by a novel bacterial species, Gluconacetobacter oboediens. Maximum bacterial cellulose production of 0.85g/100ml was achieved in crude distillery effluent. The production was successfully scaled up to 1.0L size producing 8.1g of bacterial cellulose. Morphological, structural and thermal characterization of purified bacterial cellulose by SEM, FT-IR and TGA analysis showed that it is pure cellulose having good properties. Henceforth, the present study proved a concept that distillery effluent could be utilized for the production of bacterial cellulose, a biopolymer of immense importance, which in turn may be used for producing different value added products.