Office paper shredded into various sizes was used as a model substrate for waste paper in the present work, aimed at developing an efficient utilization for waste cellulosics. The enzymatic hydrolysis of the office paper was carried out in an external loop airlift bubble column reactor equipped with an ultrasonic horn system, by sparging with water-saturated or unsaturated gas. The enhanced hydrolysis was characterized by a two-stage time course when either water-unsaturated air or nitrogen was bubbled into the reaction suspension in the airlift reactor, without ultrasonic irradiation. In contrast, a much lower enhanced effect was observed when either saturated air or nitrogen was employed. The total sugar productivity with sparging by either saturated air or nitrogen was lower than in the case of sparging by unsaturated gas. This was ascribed to a shear stress acting on the surface of the paper in the gas sparging section in the riser. The critical superficial gas velocity for complete circulation of the substrate was reduced as its size was decreased. The smaller paper size for sparging with unsaturated air resulted in a more enhanced hydrolysis with a more remarkable two-stage time course. In the case of sparging with saturated air, the continuous ultrasonic irradiation was effective for enhancing the enzymatic hydrolysis. The time courses of the glucose and total sugar concentrations were successfully analyzed and simulated, based on the kinetic model proposed previously. The variation in the paper size, sparging gas humidity and ultrasonic irradiation exerted an effect on the apparent rate constant and ultimate total sugar concentration, but had no effect on the apparent Michaelis, competitive inhibition and equilibrium constants.