Lignocellulosic biomass is the earth’s most abundant renewable feedstock alternative that comprises of cellulose, hemi-cellulose and lignin. The synergistic action of cellulolytic/xylanolytic enzymes produced by lignocellulolytic micro-organisms such as bacteria, algae and fungi are capable of robust cellulosic biomass deconstruction. Most of the microorganisms dwelling in extreme environmental habitats such as rumen environment, hot/cold springs, deep ocean trenches, acidic/alkaline pH environment have been considered as an attractive producers of hemi/cellulolytic lignocellulolytic and other biotechnological enzymes with enhanced bio-chemical properties essential for industrial bioconversion processes. However, the potential microbial sources of cellulolytic enzymes and the underlying mechanism to achieve this is not fully elucidated. In this review article, first we detail the composition of lignocellulosic biomass. Next, we describe the structure and functions of divergent hydrolytic enzymes (cellulolytic and xylanolytic enzymes) involved in cellulosic biomass degradation. Third, we analyze, outline and unveil the prospective source of microbes encoding exceptionally diverse set of biotechnologically relevant cellulolytic enzymes which are critical to answer the specific ecological question of by whom, where and how cellulosic biomass is degraded in the environment. Finally, this review article features the snapshot about the future developments and perspectives on microbial enzymes, high-throughput techniques and molecular tools that could be exploited to derive those enzymes from the potential sources.