Microbial degradation of lignocellulosic biomass is primarily affected by the composition and structure of biomass, as well as enzyme activities that are influenced by the presence of in-process degradation products. This study focuses on the latter, and demonstrates that cellulase activity of Neurospora discreta is stimulated in the presence of in-process soluble lignin degradation products. Two types of biomass - cocopeat and sugarcane bagasse, with contrasting lignin content and cellulose structure were tested at two biomass loadings each. At the higher biomass loading, cocopeat showed the highest amount of hydrolyzed cellulose and cellulase activity, despite its low cellulose content and recalcitrant cellulose structure. A strong positive correlation was revealed between the amount of in-process degraded lignin and cellulase activity, indicating a stimulatory effect on cellulase, which contradicts most previous literature. Furthermore, the causal relationship between the amount of degraded lignin and cellulase activity was established in a model system of commercial cellulase and standard soluble lignin. This work could pave the way for using biomass loading as a process lever to enhance cellulose hydrolysis in microbial conversion of lignocellulosic biomass.