The wide variety of bacteria in the environment permits screening for more efficient cellulases to help overcome current challenges in biofuel production. This study focuses on the isolation of efficient cellulase producing bacteria found in organic fertilizers and paper mill sludges which can be considered for use in large scale biorefining. Pure isolate cultures were screened for cellulase activity. Six isolates: S1, S2, S3, S4, E2, and E4, produced halos greater in diameter than the positive control (Cellulomonas xylanilytica), suggesting high cellulase activities. A portion of the 16S rDNA genes of cellulase positive isolates were amplified and sequenced, then BLASTed to determine likely genera. Phylogenetic analysis revealed genera belonging to two major Phyla of Gram positive bacteria: Firmicutes and Actinobacteria. All isolates were tested for the visible degradation of filter paper; only isolates E2 and E4 (Paenibacillus species) were observed to completely break down filter paper within 72 and 96 h incubation, respectively, under limited oxygen condition. Thus E2 and E4 were selected for the FP assay for quantification of total cellulase activities. It was shown that 1%(w/v) CMC could induce total cellulase activities of 1652.2±61.5 and 1456.5±30.7 μM of glucose equivalents for E2 and E4, respectively. CMC could induce cellulase activities 8 and 5.6 X greater than FP, therefore CMC represented a good inducing substrate for cellulase production. The genus Paenibacillus are known to contain some excellent cellulase producing strains, E2 and E4 displayed superior cellulase activities and represent excellent candidates for further cellulase analysis and characterization.