To analyze the microbial diversity and gene content of a thermophilic cellulose-degrading consortium from hot springs in Xiamen, China using 454 pyrosequencing for discovering cellulolytic enzyme resources. A thermophilic cellulose-degrading consortium, XM70 that was isolated from a hot spring, used sugarcane bagasse as sole carbon and energy source. DNA sequencing of the XM70 sample resulted in 349,978 reads with an average read length of 380 bases, accounting for 133,896,867 bases of sequence information. The characterization of sequencing reads and assembled contigs revealed that most microbes were derived from four phyla: Geobacillus (Firmicutes), Thermus, Bacillus, and Anoxybacillus. Twenty-eight homologous genes belonging to 15 glycoside hydrolase families were detected, including several cellulase genes. A novel hot spring metagenome-derived thermophilic cellulase was expressed and characterized. The application value of thermostable sugarcane bagasse-degrading enzymes is shown for production of cellulosic biofuel. The practical power of using a short-read-based metagenomic approach for harvesting novel microbial genes is also demonstrated.