Saccharophagus degradans 2-40 is a marine gamma proteobacterium that can produce polyhydroxyalkanoates from lignocellulosic biomass using a complex cellulolytic system. This bacterium has been annotated to express three surface-associated β-glucosidases (Bgl3C, Ced3A, and Ced3B), two cytoplasmic β-glucosidases (Bgl1A and Bgl1B), and unusual for an aerobic bacterium, two cytoplasmic cellobiose/cellodextrin phosphorylases (Cep94A and Cep94B). Expression of the genes for each of the above enzymes was induced when cells were transferred into a medium containing Avicel as the major carbon source except for Bgl1B. Both hydrolytic and phosphorolytic degradation of cellobiose by crude cell lysates obtained from cellulose-grown cells were demonstrated and all of these activities were cell-associated. With the exception of Cep94B, each purified enzyme exhibited their annotated activity upon cloning and expression in E. coli. The five β-glucosidases hydrolyzed a variety of glucose derivatives containing β-1, (2, 4, or 6) linkages but did not act on any α-linked glucose derivatives. All but one β-glucosidases exhibited transglycosylation activity consistent with the formation of an enzyme-substrate intermediate. The biochemistry and expression of these cellobiases indicate that external hydrolysis by surface-associated β-glucosidases coupled with internal hydrolysis and phosphorolysis are all involved in the metabolism of cellobiose by this bacterium.