The medium components for the production of extracellular xylanase by Thermoascus aurantiacus was optimized in shake-flask culture using the Box-Wilson method and a central composite design. The traditional one-factor-at-a-time method was employed for selecting the effective factors and the initial test range of each ingredient. The optimized medium composition was found to be 3.24% wheat straw (steam pretreated, particle size approx. 0.25 mm), 1.32% pharmamedia and 0.49% KH 2PO 4. Other compounds such as inorganic nitrogen, MgSO 4, CaCl 2, trace elements and vitamins showed no marked positive effect on the enzyme yield by the fungus, while Tween-80 exhibited slight enhancing effect. The optimized culture medium and conditions gave 5347.4 nkat ml −1 of xylanase, 3.0 nkat ml −1 of β-xylosidase, 1.0 nkat ml −1 of acetyl esterase, 89.7 nkat ml −1 of acetyl xylan esterase and 3.5 nkat ml −1 of α-arabinosidase activities. In addition to xylanase activities, the culture filtrates exhibited cellulases (filter paper cellulase, carboxymethyl cellulase and β-glucosidase), mannanases (endo-mannanase, β-mannosidase and α-galactosidase) and other polysaccharases (pectinase, chitinase and α-amylase) activities. In a bioreactor culture, the production of xylanase and β-xylosidase was markedly influenced by the pH and inoculum type. The fungus produced maximum enzymes when the pH was not controlled and repressed mycelial inoculum was used. Under these conditions the yield of xylanase was about 30% lower and that of β-xylosisdase was at least 2-fold higher in comparison to those achieved in shake-flask cultures. The pH optimum of xylanase and β-xylosidase was 5.0. The optimum temperature for xylanase was 80°C, while β-xylosidase functioned optimally at 75°C. The enzymes exhibited remarkable stabilities at high temperatures (50–70°C) for prolonged period. At 70°C, the half-lives of xylanase and β-xylosidase were approx. 204 h and 113 h, respectively.