The enzymatic hydrolysate of wastepaper was evaluated for its cellulase-inducing capability and production characteristics in continuous culture of Trichoderma reesei RUT C30. Under the study conditions, i.e., pH 5.0, temperature 25 degrees C, and typical medium C:N ratio, the apparent cell yield constant was found to be 0.76 (g of dry cell weight/g of reducing sugar), and the maximum specific cell growth rate was 0.26 h(-1) The study on the effects of medium C:N ratio confirmed an important role of N sources in the cellulase synthesis. The cellulase production decreased significantly when the feed concentrations of N sources were reduced. An experiment at pH 7.5 with 4-fold N source concentrations also led to poorer cellulase production. When compared with cellulose, the wastepaper hydrolysate was found to have similar cellulase-inducing strength and to induce an apparently complete set of cellulase components. The hydrolysate was also concluded to be a better soluble inducer than sophorose. While comparable at a low dilution rate (0.012 h(-1)), the specific cellulase productivities of the hydrolysate-supported and the sophorose-induced systems exhibited opposite trends with increasing dilution rates. The specific productivity in sophorose-induced systems decreased with an increase in the dilution rate. On the other hand, with increasing dilution rate the specific productivity in the hydrolysate-supported systems increased from 2.2 FPU/g.h at D = 0.012 h(-1) to 12.2 FPU/g.h at D = 0.122 h(-1) before beginning to decline. The initial increasing trend was attributed to the higher concentrations of inducing oligomer intermediates at larger dilution rates.