Present research was conducted to synthesize xylanase enzyme by Aspergillus niger using local agricultural wastes/by products for its utilization in baking industry. Wheat bran, corn cobs and sugar cane bagasse were used as carbon source at different concentrations i.e. 2.5, 3.0 and 3.5% employing submerged fermentation. The factors like temperature, pH and incubation time affected the xylanase synthesis significantly at various levels of substrates. The outcomes of the fermentation process showed that culture conditions i.e. 30°C, pH 5.5, 72 hrs & 3% substrates concentration were optimum for xylanase production. Wheat bran showed maximum xylanase activity 78.03±2.73 IU/mL followed by corn cob, 60.03±1.83 IU/mL and sugar cane bagasse 44.03±1.98 IU/mL. Large scale production of xylanase was carried out using wheat bran as carbon source at preoptimized conditions. Purified enzyme showed the specific activity of 613.13 IU/mg protein as compared to crude enzyme 41.85 IU/mg protein. Characterization of xylanase indicated that pH 7.5 and 55°C were optimum for maximum activity. As the ultimate goal was to apply xylanase in food products i.e. bread, so it was subjected to efficacy studies using experimental poultry birds. It is deduced that values for body growth performance, serological and hematological parameters were within normal ranges showing the safety of enzyme. In order to assess the potential of xylanase in bread making; a comparative study was conducted in which enzyme was applied in various doses at two different stages i.e. tempering of wheat kernels before milling and mixing of dough. Xylanase addition modified the rheological attributes of dough, especially farinographic, mixographic and amylographic characteristics. Furthermore, xylanase decreased dryness and stiffness of the dough whereas, resulted in increased elasticity, extensibility and coherency. It is concluded from the rheological and allied characteristics that enzyme addition improved the dough handling properties. Bread volume was increased in response to xylanase addition during tempering up to 600 IU/kg and during mixing stage up to 800 IU/kg. Additionally, specific and relative volume increased whereas, density decreased in response to xylanase application. Moisture retention capacity of bread samples also improved as a result of enzyme treatments. Lastly, sensory evaluation was conducted to study the effect of xylanase treatments on the external and internal characteristics of the bread. Enzyme treatments resulted in marked improvement in these traits, though in most of the cases, T3 (600 IU/1kg) showed better performance. The statistical results indicated that addition of xylanase during tempering is more beneficial and cost effective in enhancing the hedonic response as compared to mixing. In the nutshell, wheat bran at 3% concentration can be used as a potential carbon source for the production of xylanase enzyme under pre-optimized conditions. Overall, improvement in dough handling characteristics and bread quality traits indicates that xylanase has potential to be used in the baking industry.