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Litter is the dead organic remains of plants and animals present in natural habitats. Soil micro-organisms are attached with litter and convert complex organic matter into simple inorganic compounds. Present study has been undertaken with a view to understand the biochemistry involved in the decomposition process occurring in the Orchha forest range of Madhya Pradesh. For this degrading samples have been collected from the forest and in all 17 fungal genera have been isolated from collected samples. All the identified strains have been subjected to test xylanolytic activity. Fungus Aspergillus niger has been found to have xylanolytic activity. Then after the growth parameters such as incubation period, temperature, pH, carbon and nitrogen sources have been optimized for optimum growth conditions for maximum enzyme production under liquid state fermentation (LSF). In the present study, wheat bran and corn cobs (powdered) have been used as substrates for enzyme production. Maximum xylanase production was observed at 7th day & 9th day of incubation, 4 mg/mL & 20 mg/mL of substrate, 0.3 mg/mL & 0.5 mg/mL of peptone,0.8 mg/mL & 0.9 mg/mL of yeast extract for wheat bran and corn cobs respectively. The optimum temperature and pH for each substrate was 30°C and 5.5. Enzyme activity was also optimized for certain parameters such as incubation period, temperature, pH and substrate (Oat spelt xylan) concentration. [ABSTRACT FROM AUTHOR]