Cellulase activity and degradation of cellulose and lignin in wheat straw and formation of humus during degradation by Botryotrichum sp., Masoniella sp., Paecilomyces fusisporus, Sclerotium sp. and Trichurus spiralis was studied. All the cultures exhibited carboxy-methyl-cellulase activity, but cellulase activity on cellulose powder, filter paper and cotton was shown only by Masoniella sp., P. fusisporus and Sclerotium sp. when grown on cellulose powder in submerged culture conditions. However, when grown on wheat straw in solid culture all fungi exhibited FPD activity. All except Masoniella sp. degraded both cellulose and lignin efficiently as compared to cellulose. There was formation of humus like substances during growth of fungi on wheat straw.