A genomic library of Xanthomonas oryzae pv. oryzae (X. o. pv. oryzae) T7174 was screened for 4-methylumbelliferyl β-D-glucoside-hydrolyzing (MUGase) activity. In subcloning of one of the MUGase-positive clones, an approximately 4.2-kb SacI-SphI fragment conferred not only MUGase activity but also 4-methylumbelliferyl β-D-cellobioside-hydrolyzing (MUCase) activity. Sequence analysis showed that the fragment contained an ORF of 2951 bp. The conceptual ORF product was significantly homologous with 1,4-β-D-glucan glucohydrolase D (CELD) from Pseudomonas fluorescens subsp. cellulosa, and was named CELDXo. Cell fractionation experiments suggested that CELDXo is localized in the cell-envelope fraction. We constructed a CELDXo-deficient mutant (74ΔCELD) from X. o. pv. oryzae. Little MUCase activity was detected in the cell-envelope fraction prepared from the mutant. The mutant 74ΔCELD did not grow in synthetic medium containing cellobiose as the sole sugar source. On the other hand, growth in rice leaves and pathogenicity of the mutant and the parental strain did not differ. These results suggested that CELDXo is involved in cellobiose utilization of X. o. pv. oryzae but that the gene is not required for bacterial growth in rice leaves.