Several members of the glycoside hydrolase 61 (GH61) family of proteins have recently been shown to dramatically increase the breakdown of lignocellulosic biomass by microbial hydrolytic cellulases. However, purified GH61 proteins have neither demonstrable direct hydrolase activity on various polysaccharide or lignacious components of biomass nor an apparent hydrolase active site. Cellobiose dehydrogenase (CDH) is a secreted flavocytochrome produced by many cellulose-degrading fungi with no well-understood biological function. Here we demonstrate that the binary combination of Thermoascus aurantiacus GH61A (TaGH61A) and Humicola insolens CDH (HiCDH) cleaves cellulose into soluble, oxidized oligosaccharides. TaGH61A-HiCDH activity on cellulose is shown to be nonredundant with the activities of canonical endocellulase and exocellulase enzymes in microcrystalline cellulose cleavage, and while the combination of TaGH61A and HiCDH cleaves highly crystalline bacterial cellulose, it does not cleave soluble cellodextrins. GH61 and CDH proteins are coexpressed and secreted by the thermophilic ascomycete Thielavia terrestris in response to environmental cellulose, and the combined activities of T. terrestris GH61 and T. terrestris CDH are shown to synergize with T. terrestris cellulose hydrolases in the breakdown of cellulose. The action of GH61 and CDH on cellulose may constitute an important, but overlooked, biological oxidoreductive system that functions in microbial lignocellulose degradation and has applications in industrial biomass utilization.