The present investigation highlights the optimal conditions for production of a non-toxic, bi-functional fibrinolytic enzyme xylarinase produced by endophytic fungus Xylaria curta by solid substrate fermentation using rice chaff medium. The purified enzyme is a monomeric protein with a molecular mass of similar to 33 kDa. The enzyme exhibits cleavage of A alpha and B beta chains of fibrin(ogen) and has no effect on gamma chain. The optimal fibrinolytic activity of the enzyme was observed at 35 A degrees C and pH 8. The fibrinolytic activity was enhanced in the presence of Ca2+, whereas it was completely inhibited in the presence of Fe2+ and Zn2+ ions and inhibitors like EDTA and EGTA suggesting it to be a metalloprotease. The K (m) and V (max) of the enzyme for azocasein were 326 mu M and 0.13 mu M min(-1). The N-terminal sequence of the enzyme (SNGPLPGGVVWAG) was same when compared to xylarinase isolated from culture broth of X. curta. Thus, xylarinase could be exploited as a potent clot busting enzyme which could be produced on large scale using solid substrate fermentation.