Thermo- and alkali-stable xylanases produced from Thielaviopsis basicola (MTCC-1467) on low-cost carbon source like rice straw were evaluated for their potential application in biobleaching of wood kraft pulp. Enzyme treatment at retention time of 240 min with 20 IU/gm of dried pulp resulted in similar to 85.2 % of reduction in kappa number. When compared to control, 110.8, 93, and 72.2 % of enhancement in brightness (percent International Organization of Standardization), whiteness, and fluorescence, respectively, were observed for enzyme-treated pulp. Spectroscopic analysis showed significant release of chromophoric compounds from enzyme-treated pulp. Furthermore, scanning electron microscope studies of unbleached and enzyme bleached pulp revealed the effectiveness of enzymatic treatment. The enzyme-treated pulp subjected to later stages of chemical bleaching resulted in 16 % decrease in chlorine consumption along with considerable reduction in chemical oxygen demand percentage (14.5 %) level of effluent. Various pulp properties like fiber length, fiber width, burst strength, burst index, tear strength, tear index, tensile strength, and breaking length were also significantly improved after enzyme treatment when compared to control.