The development of methods to reduce costs associated with the solubilization of cellulose is essential for the utilization of lignocellulose as a renewable feedstock for fuels and chemicals. One promising approach is the genetic engineering of ethanol-producing microorganisms that also produce cellulase enzymes during fermentation. By starting with an ethanologenic derivative (strain P2) of Klebsiella oxytoca M5A1 with the native ability to metabolize cellobiose, the need for supplemental -glucosidase was previously eliminated. In the current study, this approach has been extended by adding genes encoding endoglucanase activities. Genes celY and celZ from Erwinia chrysanthemi have been functionally integrated into the chromosome of P2 using surrogate promoters from Zymomonas mobilis for expression. Both were secreted into the extracellular milieu, producing more than 20,000 endoglucanase units (carboxymethyl cellulase activity) per liter of fermentation broth. During the fermentation of crystalline cellulose with low levels of commercial cellulases of fungal origin, these new strains produced up to 22% more ethanol than unmodified P2. Most of the beneficial contribution was attributed to CelY rather than to CelZ. These results suggest that fungal enzymes with substrate profiles resembling CelY (preference for long-chain polymers and lack of activity on soluble cello-oligosaccharides of two to five glucosyl residues) may be limiting in commercial cellulase preparations.