A cellulase-free, thermo-alkali-stable, salt- and solvent-tolerant xylanase (Bhxyl) was produced from mutant strain of a newly isolated Bacillus halodurans FNP 135. Bhxyl showed optimal activity at 75 0C and was stable at pH 6-10, displaying 60% activity even at pH 12. Its T½ was 45 min at 70 0C. Bhxyl retained 76% activity in 1M NaCl and was highly tolerant (> 85%) to organic solvents (50% v/v) and surfactants (1%). Thin layer chromatography analysis revealed that xylose was the sole end product of xylan hydrolysis by the crude enzyme. Bhxyl yield was enhanced by mutation and optimization of process parameters for wheat bran based solid state fermentation (SSF) using Plackett-Burman design and response surface methodology. Under optimal conditions viz. incubation time, 68.40 h; sodium carbonate, 2.31% (w/w) and wheat bran: moisture ratio, 1:0.8 (w/v) in tap water, a yield of 5056 ± 96 U/g wheat bran, a 16 fold increase over unoptimized conditions, was obtained. Cost effective enhanced production of a highly stable xylanase was achieved for its biotechnological applications in pulp and paper industry and biomass degradation.