In the current studies, we sequenced and characterized the genomic and complementary deoxyribonucleic acid clones encoding the cellobiohydrolase encoding genes cel1 and cel2 of Polyporus arcularius. The predicted amino acid sequences of Cel1 and Cel2 are similar to glycosyl hydrolase family 7 and 6 proteins, respectively. The expression of cel1 and cel2 was induced by microcrystalline cellulose (Avicel) and cellopentaose but repressed by glucose, cellobiose, cellotriose, and cellotetraose. There was a very low level of cel1 and cel2 transcription regardless of the carbon source. These results suggest that P. arcularius cells constitutively express a very low level of cellulase that can degrade insoluble crystalline cellulose and that the transcription of cel1 and cel2 in the cells is induced by products produced by these endoglucanases such as cellooligosaccharides.