A cellulose degrading strain DSH was isolated from the sediment of Dianshan Lake, Huangpu River, Shanghai. Basing on morphology, biochemical and physiological characterization, DSH was characterized as Bacillus cereus. A phylogenetic tree was constructed with the published 16S rRNA sequences of relative bacteria species. In the phylogenetic tree, the DSH strain is in a new branch which has the closest relative to Bacillus cereus strain JBE0004 with 99.78% sequence similarity. The generation of cellulose was closely correlated to its growth rate. The highest cellulose activity of DSH strain was 4.58 U/mL when grown at 37oC, pH 7.0 for 66 h.