Class I cellobiose dehydrogenases (CDHs) are extracellular hemoflavo enzymes produced at low levels by the Basidiomycetes (white rot fungi). In presence of suitable electron acceptors, e.g., cytochrome c, 2,6-dichlorophenol-indophenol, or metal ions, it oxidizes cellobiose to cellobionolactone. A stringent requirement for disaccharides makes CDH also useful for conversion of lactose to lactobionic acid, an important ingredient in pharma and detergent industry. In this work, class I CDH was produced using a newly identified white rot fungus Termitomyces sp. OE147. Four media were evaluated for CDH production, and maximum enzyme activity of 0.92 international unit (IU)/ml was obtained on Ludwig medium under submerged conditions. Statistical optimization of N source, which had significant effect on CDH production, using Box-Behnken design followed by optimization of inoculum size and age resulted in an increase in activity to 2.9 IU/ml and a productivity of similar to 25 IU/l/h. The nearly purified CDH exhibited high activity of 26.4 IU/mg protein on lactose indicating this enzyme to be useful for lactobionic acid synthesis. Some of the internal peptide sequences bore 100 % homology to the CDH produced in Myceliophthora thermophila. The fungal isolate was amenable to scale up, and an overall productivity of similar to 18 IU/l/h was obtained at 14-l level.