The production of beta-glucosidase by Aspergillus terreus was investigated in liquid shake cultures. Enzyme production was maximum on the 7th day of growth (2.18 U/ml) with the initial pH of the medium in the range of 4.0-5.5. Cellulose (Sigmacell Type 100) at 1.0% (wt/vol) gave maximum beta-glucosidase activity among the various soluble and insoluble carbon sources tested. Potassium nitrate was a suitable nitrogen source for enzyme production, Triton X-100 at 0.15% (vol/vol) increased the enzyme levels of A. terreus. The test fungal strain showed an ability to ferment glucose to ethanol.