In the present study, 20 different strains of Alkalibacillus flavidus were isolated from soils of industrial, agricultural and mountainous ranges of salt affected areas. After preliminary and secondary screening, isolate Isl-3 was selected as a better producer (5.25 ± 0.52 IU/g) of acetyl xylan esterase (AcXE). The wild-type Isl-3 was mutated to improve its hydrolytic potential by treating it with different EMS concentrations (0.25–1.5 mM). A relatively better enzyme activity (18.95 ± 0.95 IU/g) was observed at 0.5 mM EMS conc. The mutagenic exposure time was varied from 5 to 30 min, and a mutant strain (EMS-t3 was selected as it provided maximum enzyme activity (19.47 ± 0.97 IU/g) in 15 min. The resistance in EMS-t3 was developed by adding low-levels of l-cysteine HCl as a repressing agent. The enzyme activity of wild-type Isl-3 was compared with the putative mutant strain EMS-cys2 in semi-solid culture of linseed meal. The maximum enzyme activity (21.15 ± 1.05 IU/g) was obtained at substrate conc. of 7.5 g/50 ml of MSS by the mutant strain EMS-cys2. An increase in enzyme activity was noticed by both the strains when physical parameters including moisture content (100 ml), time of incubation (48 h), initial pH (9.5) and temperature (45 °C) were optimized. Overall, there was up to 6.8-fold increase in enzyme activity of mutant strain than that of wild-type. The substantial enhancement in enzyme activity by the mutant strain A. flavidus EMS-cys2 (34.65 ± 1.53 IU/g) is highly significant (HS, p ≤ 0.05) and could be a viable alternative (LSD ~ 0.046) for the routine batch culture process.