Utilization of biopolymeric functionalized nanocomposites for enzyme immobilization has been actively explored for their potential role as catalysts in sustainable agro-residue valorization models. In the present study, cellulase immobilization on control and chitosan functionalized magnetic nanoparticles (c-MNP & Ch-MNP, respectively) was investigated. A cellulase binding efficiency of 67.50% on c-MNP and 74.06% on Ch-MNP was achieved. The enzyme immobilization on nano-supports was confirmed using electron microscopic and spectroscopic techniques. The immobilized cellulase (E-Ch-MNP) exhibited carboxymethyl cellulase, cellobiase and avicelase specific activities of 48.68, 25.98 and 33.80 nmol min−1 mg−1 protein. The optimum pH for free and immobilized enzyme were reported to be pH 5 and 6, respectively. An increased thermal stability for E-Ch-MNP was observed over a broader temperature range with a peak relative enzyme activity at 60℃. The binding constant (Km= 5.00 mg ml−1) and maximal rate of reaction (Vmax= 0.12 µmol min−1 ml−1) were also determined for E-Ch-MNP. Molecular docking studies determined the flexibilities of both the receptor cellulase protein and the ligand immobilization support molecules with respect to the binding energy and inhibition constants, reflecting their desired conformation and stability. Maximum reducing sugar content of 242.14 mg g−1 of pre-treated straw was reported at 96 h of incubation for E-Ch-MNP with a saccharification efficiency of 35.78%. The retained relative activity of immobilized cellulase was 82.83, 75.17, 44.61 and 27.95% of initial activity after second, third, fourth and fifth cycle, respectively. Therefore, immobilization of cellulase on chitosan coated magnetic nanoparticles holds promise for further optimization for improved cellulose hydrolysis.