The regulation of endoglucanase synthesis in Penicillium funiculosum is investigated using a method based on the viscosity lowering effect on carboxy methyl cellulose (CMC) by endoglucanase. Cellobiose (1 mg/L) causes induction, whereas glucose (5 g/L) does not repress the enzyme formation. Lactose (5 g/L) has no effect on the synthesis of cellulase. Avicel and cellulose powder (CP) are the best inducers of cellulase and xylanase activity. Both endoglucanase and xylanase activity were induced by CMC, whereas xylan induced only xylanase activity. The effect of protease on induction of cellulase activity is discussed.