In the present study, an attempt was made to utilize the distillery effluent for the production of bacterial cellulose by a novel bacterial species, Gluconacetobacter oboediens. Maximum bacterial cellulose production of 0.85 g/100 ml was achieved in crude distillery effluent. The production was successfully scaled up to 1.0 L size producing 8.1 g of bacterial cellulose. Morphological, structural and thermal characterization of purified bacterial cellulose by SEM, FT-IR and TGA analysis showed that it is pure cellulose having good properties. Henceforth, the present study proved a concept that distillery effluent could be utilized for the production of bacterial cellulose, a biopolymer of immense importance, which in turn may be used for producing different value added products.