A variety of indigenous microbial strains were found to be involved in decomposition of agro-industrial residues for preparation of dry and wet composts.Among them four fungal isolates were found to be dominant in decomposition of the lignocellulosics of the residues. These isolates identified as Trichoderma sp., Aspergillus niger, Aspergillus flavus and Penicillum sp. were capable of producing Cellulolytic and Xylanolytic enzymes. Agro-wastes were inoculated with the isolates as mixed culture for determining their enzymatic activity during compostingwhere enzymatic activity was stable up to 15 days, but pH was found to be gradually dropped to 4. Trichoderma sp. was found to be most potential in producing celluloytic and Xylanolytic enzymes. However, growth of Aspergillus flavus was faster than that of Trichoderma sp. in Potato Dextrose Agar medium.