The cost of cellulose degrading enzymes is still a major barrier to the economical production of liquid fuels from lignocellulose. Fungi play a central role in the degradation of plant biomass in terrestrial environments. They use a wide variety of secreted enzymes to break down biopolymers present in the plant cell wall. Here I report on the mechanisms of cellulose degradation used by Neurospora crassa, a model genetic organism, and Myceliopthora thermophila, a thermophilic fungus. Enzymes important for the degradation process were identified using a combination of transcriptomics, proteomics, genetics, and biochemistry. A key result from this work is that, in N. crassa and many other fungi, oxidative enzymes play a critical role in the depolymerization of cellulose. In contrast to the accepted models of oxidative cellulose degradation, via non-specific hydroxyl radical species, I found that in N. crassa, an oxidoreductase and several copper oxidases bind to cellulose and hydroxylate the substrate at specific positions leading to cleavage of the glycosidic bonds. This mode of action is orthogonal to that of traditional hydrolases and if used optimally in conjunction with other cellulases, could reduce the required enzyme loading for lignocellulose saccharification by 2-4 fold.