Processive cellobiohydrolases (CBHs) are the key components of fungal cellulase systems. Despite the wealth of structural data confirming the processive mode of action, little quantitative information on the processivity of CBHs is available. Here, we developed a method for measuring cellulase processivity. Sensitive fluorescence detection of enzyme-generated insoluble reducing groups on cellulose after labeling with diaminopyridine enabled quantification of the number of reducing-end exo-mode and endo-mode initiations. Both CBHs TrCel7A from Trichoderma reesei and PcCel7D from Phanerochaete chrysosporium employed reducing-end exo- and endo-mode initiation in parallel. Processivity values measured for TrCel7A and PcCel7D on cellulose hydrolysis were more than an order of magnitude lower than the values of intrinsic processivity that were found from the ratio of catalytic constant (k(cat)) and dissociation rate constant (k(off)). We propose that the length of the obstacle-free path available for a processive run on cellulose chain limits the processivity of CBHs on cellulose. TrCel7A and PcCel7D differed in their k(off) values, whereas the k(cat) values were similar. Furthermore, the k(off) values for endoglucanases (EGs) were much higher than the k(off) values for CBHs, whereas the k(cat) values for EGs and CBHs were within the same order of magnitude. These results suggest that the value of k(off) may be the primary target for the selection of cellulases.