Cell-free enzymes from Myrothecium verrucaria and Trichoderma koningii hydrolyse native undegraded cellulose, as found in cotton fibres, in a random manner to short insoluble fibres and to minor amounts of soluble products. 2. Enzyme preparations from M. verrucaria fail to attack the short fibres whereas preparations from T. koningii solubilize them completely to sugars at an optimum pH4.2-4.6. 3. The mode of hydrolysis of cotton cellulose by preparations from T. koningii involves from the earliest stages the formation of reducing sugars, followed closely by the appearance of short fibres, until the insoluble and soluble products each constitute about 40-50% of the weight of the initial substrate. After this stage the quantity of sugars increases at the expense of the insoluble short fibres. 4. Depending upon the method of preparation, derived forms of cellulose may be hydrolysed more slowly, much more rapidly, or at the same rate as cotton fibres by enzyme preparations from T. koningii.