Paper pulp effluent degrading bacteria was isolated from hypersaline environment situated at beach road , Tuticorin, Tamil Nadu . The bacteria was characterized as Bacillus cereus - IND-3 by biochemical and 16 s r RNA sequencing . The bacteria was optimized by physico-chemical Parameters and nutritional sources such as carbon, nitrogen and metal ions for maximum xylanase production. At pH 7.5, 350C temperature, 2.5mM NaCl concentration and 72 hours of incubation maximum xylanase and biomass production was recorded. Among the nutritional sources, carbon source rice bran showed maximum xylanase and biomass production ( 69.4 U / ml and 21.4 mg / ml respectively) followed by nitrogen source gelatin (74.3 U / ml and 29.2 mg / ml respectively ) and metal ions - Ca Cl2 ( 77.4 U / ml and 31.5 mg / ml respectively ) . The extracellular xylanase enzyme obtained from the halophilic bacteria B.cereus -IND-3 was used for biodegradation of paper pulp effluent .The pretreated raw effluent showed high level of pH , temperature , BOD , COD , TDS and TH. But, the extracellular xylanase enzyme treated effluent recorded with reduction of impurities after the five days of incubation. The biodegradation studies revealed that the percentage of reduction was highest in TDS ( 67.70 % ) followed by BOD ( 39.79 % ) , TH ( 36.45 % ) , COD ( 26.40 % ) pH ( 4.172 % ) and Temperature ( 2.32 % ) in the xylanase enzyme treated effluent. The GC -MS analysis of raw and xylanase treated paper pulp effluent showed that many toxic compounds exist in the raw effluent was degraded and new compounds with less toxicity were generated due to the action of the extracellular alkaline xylanase enzyme.