Cellulose is the abundant biopolymer available on earth. It is naturally present in plant as lingo cellulosic biomass. Cellulose is also synthesized by algae, tunicates, and some bacteria. Cellulase refers to a class of enzymes which involved in hydrolysis of cellulose molecules into glucose monomer by synergistic action of endoglucanase, exoglucanse and β glucosidases. Bacteria, which has high growth rate as compared to fungi has good potential to be used in cellulase production. They are less inhibited by feedback inhibition. Bacteria can also be genetically engineered for better production. In this work we have done comparative study of bacterial isolates from the environment for the better production using congo red assay and Carobxymethyl celluase assay. The bacterial isolate B found to be the best producer with 0.0493 U celluase activity. The optimum pH was found to be 6 and the optimum temperature of production is 50°C. The growth curve shows the production is growth oriented and reaches the maximum production between 38 - 44 hours in submerged fermentation at lab scale conditions. Agave sisalana fibre was used as the substrate for both submerged fermentation and solid state fermentation. Process optimization was done on different Nitrogen sources. Ammonium chloride and peptone was found as optimum nitrogen sources for cellulase production in solid state fermentation and submerged fermentation respectively. The isolate B showed good results in cellulase production at pH-6.0. Activity of cellulase enzyme produced by solid state fermentation and submerged fermentation was found to be 0.073 U with ammonium chloride and 0.093 U with peptone as nitrogen sources respectively.