Optimization of cellulase production by thermophilic mould Myceliophthora thermophila BJTLRMDU3 was studied in solid state fermentation. Myceliophthora thermophila produced maximum cellulase (45.81 U/g DMR) at substrate to moisture ratio of 1:3 with 5-d old inoculum at water activity 0.95, ammonium sulfate (0.5%) and PEG 20000 (0.5%) at 45 °C using “one variable at a time” approach. Further supplementation of Tween-20 (0.5%) and K2HPO4 (0.25%) enhanced the cellulase production (56.06 U/g DMR) by M. thermophila in SSF. Optimization of saccharification by partially purified cellulase of M. thermophila (20 U), liberated maximum reducing sugars at pH 5.0 (185.56 mg/g substrate) and 60 °C (190.83 mg/g substrate) after 24 h (203.91 mg/g substrate) from sodium carbonate pretreated rice straw as compared to untreated biomass. Liberated reducing sugars were higher in sodium carbonate pretreated rice straw than untreated rice straw.