Evidence has previously suggested that cellobiose:quinone oxidoreductase (CBQ) in cellulolytic cultures of Phanerochaete chrysosporium might be produced from cellobiose oxidase (CBO) by proteolytic cleavage. This study demonstrates that the ratio of CBO activity to (CBO + CBQ) activity declines with decreasing culture pH, while protease activity increases. Furthermore, we demonstrate that endogenous P. chrysosporium proteases can only cleave CBO when the enzyme is bound to cellulose. This is the first demonstration that the proteases produced in cellulolytic cultures of P. chrysosporium can release the FAD domain from CBO.