Bacillus sp. strain XE and its mutant derivative strain D3 produce a thermostable xylanase which is suitable for enzymatic bleaching of kraft pulp. Xylanase synthesis was shown to be induced by the soluble products of xylan hydrolysis (xylooligosaccharide) and equally, catabolically-repressed when these oligosaccharides accumulate in the medium. An optimal balance between these two antagonistic effects was obtained in a carbon-limited, fed-batch culture with continuous xylooligosaccharide feeding. To reduce substrate cost, the xylooligosaccharide could be 90% substituted by glucose without reduction of the xylanase production rate. Xylanase production ceased when the activity reached approximately 380 U ml - 1 due to an amino acid shortage. A continuous supply of exogenous amino acids allowed the production to continue to more than 1000 U ml - 1 .