Penicillium funiculosum NCL1, a filamentous fungus, produced significantly higher levels of β-glucosidase. The effect of initial pH, incubation temperature, and different carbon sources on extracellular β-glucosidase production was studied in submerged fermentation. At 30 °C with initial pH 5.0, enzyme production was increased by 48-fold upon induction with paper mill waste, as compared to commercial cellulose powder. In zymogram analysis, four isoforms of β-glucosidases were observed with wheat bran whereas a minimum of one isoform was observed with other carbon sources. A major β-glucosidase (Bgl3A) with the apparent molecular weight of ~120 kDa, induced by paper mill waste, was purified 19-fold to homogeneity, with a specific activity of 1,796 U/mg. Bgl3A was a monomeric glycoprotein with 29% of neutral carbohydrate content. It showed optimum activity at pH 4.0 and 5.0, optimum temperature at 60 °C, and exhibited a half-life of 1 h at 60 °C. K(m) of Bgl3A was found to be 0.057 mM with p-nitrophenyl β-D-glucoside and V(max) was 1,920 U/mg. The purified enzyme exhibited glucose tolerance with a K(i) of 1.5 mM. Bgl3A readily hydrolyzed glucosides with β-linkage. Bgl3A activity was enhanced (156%) by Zn²⁺ and was not affected by other metal cations and reagents. The supplementation of Bgl3A (5 U/mg) with Trichoderma reesei cellulase complex (5 FPU/mg) resulted in about 70% of enhanced glucose production, which emphasizes the industrial importance of Bgl3A.