The majority of ethanol is currently produced from corn; however, limited supply will require ethanol production from other sources of biomass that are rich in lignocellulose. The complexity of lignocellulose has necessitated the development of many different processes for the production of fuel ethanol from substrates containing lignocellulose, which can include physiochemical pretreatment to allow enzyme access, enzymatic saccharification to reduce substrates to fermentable sugars, and fermentation of those sugars by microorganisms. For the process to become economically feasible, inexpensive enzymes able to convert lignocellulose to fermentable sugars and ethanologenic microorganisms capable of fermenting those sugars are required. Ultimately, the most cost effective and efficient means of lignocellulose degradation will be achieved by consolidated bioprocessing, where a single microorganism is capable of producing hydrolytic enzymes and fermenting hexose and pentose sugars to ethanol at high yields. To achieve this end, ethanologen Escherichia coli KO11 was sequentially engineered to produce the Klebsiella oxytoca cellobiase and phosphotransferase genes (casAB) as well as a pectate lyase (pelE) and oligogalacturonide lyase (ogl) from Erwinia chrysanthemi, yielding strains LY40A (casAB), JP07C (casAB; pelE), and JP08C (casAB; pelE; ogl), respectively. E. coli JP08C produced significantly more ethanol than its parent strain, demonstrating the efficacy of the strategy. For future improvement of these technologies, new hydrolytic enzymes were sought by examining isolates from the hindgut of the aquatic, lignocellulose-degrading crane fly, Tipula abdominalis. A pectate lyase (pelA) from one isolate, Paenibacillus amylolyticus C27, was found while screening a genomic library in E. coli for pectinase activity. With its unusual activity on highly methylated pectin, PelA is useful for saccharification of sugar beet pulp, which is rich in this form of pectin. Moreover, while characterizing P. amylolyticus C27, production of polymyxin E1 and E2 was discovered, representing a novel source of these antibiotics.