Present study is focused on utilization of Jatropha curcas deoiled cake (JDC, a by-product of biodiesel industry), as potential source for various value added products. To produce cellulases and xylanase enzymes efficiently, JDC was used as nutrient substrate for Paecilomyces variotii in solid state fermentation. Under the optimized conditions viz., initial moisture content 70%, incubation temperature 30°C and inoculum dose 10%, maximum CMCase (383.95 IU/g), FPase (27.37 IU/g) and xylanase (4842.93 IU/g) were produced. Zymograms of crude enzyme extracts showed six active bands ranging from 35 kDa to 74 kDa for cellulases and four active bands ranging from 45-64 kDa for xylanase. Simultaneously, the addition of 10% JDC (w/w) in kitchen waste during its vermicomposting with and without P. variotii was studied. The data revealed that the inoculation of P. variotii in feedstocks with JDC not only improved the quality of vermicompost with higher nutritional status but also enhanced the growth and reproduction of earthworms manyfold.