The genes encoding cellulases, which belong to glycosyl hydrolase families have been cloned from the basidiomycetous mushrooms. The transcripts of cellulase genes are strongly induced when the mycelia are grown in medium containing crystalline cellulose, and they are not expressed in medium containing glucose, but how insoluble substrates such as microcrystalline cellulose are recognized by these fungal cells is not clear. The polypore mushroom Polyporus arcularius is a wood-decomposing basidiomycete that produces at least three types (I, II, and IIIa) of carboxymethyl cellulase (CMCase) when the medium contains crystalline cellulose as the sole carbon source and produced mainly cellobiose in the medium. The genomic and cDNA clones encoding the family 12 endoglucanase (CMCase IIIa) gene (cel3A) of P. arcularius have been sequenced, and Cel3A has been expressed as an active enzyme in Escherichia coli. To determine the role and function of each type of cellulase in the degradation of crystalline cellulose by basidiomycetous mushrooms, the structure of all of the cellulase genes should be investigated, but the nucleotide sequences of the other cellulase genes in P. arcularius have not yet been reported. In the current study, the genomic and cDNA clones encoding the endoglucanases (cel4), and the two cellobiohydrolases (cel1 and cel2) of P. arcularius sequenced and characterized. The predicted amino acid sequence of Cel1 Cel2, Cel3a and Cel4 are similar to glycosyl hydrolase family 7, 6 12 and 5 protein, respectively. The expressions of the all cellulase genes (cel1 cel2, cel3a and cel4) were induced by Avicel (microcrystalline cellulose) and cellopentaose but repressed by glucose, cellobiose, cellotriose, and cellotetraose. There was a low level of transcription of both genes regardless of the carbon source. These results suggest that P. arcularius cells constitutively express a very low level of cellulase that can degrade insoluble crystalline cellulose and that the transcription of celluases in the cells is induced by products produced by these endoglucanases such as cellooligosaccharides. From our findings, we propose a possible mechanism for the recognition and degradation of insoluble crystalline cellulose by fungal cells.