Abstract: Background and Objective: Cellulases enzymes are widely be interested due to its capability to degrade lignocellulosic materials. The current study was concerning on investigating different factors of cellulase production from fungal sources by using agricultural wastes and studying its impacts on ruminal digestion and fermentation. Materials and Methods: The study tested the cellulase enzyme production ability of fungal strains against different lignocellulosic. Simultaneously the effect of different fungal strains to choose according to the superiority of cellulase production, then environmental factors were studied such as carbon source concentrations, inoculum size, incubation period, initial pH and nitrogen source. Finally, produced cellulase was evaluated using in vitro batch culture technique. Results: Penicillium chrysogenum recorded the highest value for cellulase activity. Pea pods showed best carbon source with 17.5% concentration for cellulase production. About 4% inoculum size, 2 days of incubation and pH5 were recorded the highest value for cellulase production. In vitro fermentation results showed improvement of DM digestibility compared with control. Conclusion: The current findings showed potential possibilities to utilize agricultural wastes as a substrate for producing cellulase enzyme from Penicillium chrysogenum fugal strain which could be an effective additive to improve ruminant diet digestion and utilization.