Clostridium thermocellum is an anaerobic, thermophilic, cellulolytic, and ethanogenic bacterium. It produces an extracellular multiprotein complex termed the cellulosome, which consists of more than 70 subunits, most of them glycosyl hydrolases. It also produces many free glycosyl hydrolases. The mechanism(s) used for regulation of this large cellulase system is an intriguing yet unresolved question. We have identified two cellulase gene clusters in the bacterium. In the first cluster, we demonstrated that glyR3, was co-transcribed with the cellulase/hemicellulase genes celC and licA. Gel shift (EMSA) assays revealed that GlyR3 bound specifically to the celC promoter region. DNase I footprinting and competitive EMSA showed the binding site to be an 18 bp palindromic sequence with one mismatch. The DNA-binding activity was specifically inhibited by laminaribiose, a β-1-3 linked glucose dimer, in a dose-dependent manner. In in vitro transcription analysis, celC expression was repressed by rGlyR3. The repression was relieved by laminaribiose. These results indicate that GlyR3 is a negative regulator of the celC operon consisting of celC, glyR3, and licA, and inducible by laminaribiose. The second cluster consists of five genes (Cluster X), all of which encode proteins containing a cellulose-binding module and a dockerin. None of the genes have been previously identified. Northern blot analysis shows the co-transcription of the five genes. At least the first gene is induced by growth on cotton. These results indicate that gene clustering can be a method of regulating cellulase gene expression in this bacterium.