Abstract: Microcrystalline cellulose (Avicel 101, AV 101) has been widely used as the excipients for tablet formulation. The objective of this research was to produce cellulose from Acetobacter xylinum (A. xylinum) which is used as alternative excipient for tablet formulation instead of AV 101. The bacterium was isolated from kombucha tea preparation. Bacterial pellicle formation was cultivated in stationary conditions using a Herstin-Schramm nutrient (HS) medium. The produced Bacterial Cellulose (BC) was compared with AV 101 by carrying out Moisture Sorption Capacity (MSC), Loss on Drying (LOD), Scanning Electron Microscopy (SEM), FT-IR Spectroscopy, X-Ray diffraction analysis, micromeritic properties and compactibility studies. Comparisons revealed that MSC for AV 101 was higher when compared to BC due to crystalline nature of BC. LOD of BC was 4.635% which is required for good compression. The particles of BC were small sized densely packed reticulated structure consisting of fine thread like fibrils whereas AV 101 was irregularly large sized elongated structures. The IR spectra showed that there were no significant difference in the spectra of BC and AV 101. BC had higher crystallinity than AV 101. Micromeritic properties and compactibility studies showed that BC have high bulk density, better flow property, easy fragmentation of the particles and rearrangement at a lower compression load, lesser elastic recovery and higher tensile strength than AV 101. The result provides evidence that BC produced by HS medium can be suitably used as pharmaceutical excipient for tablet formulation instead of AV 101.