The present investigation addresses the sustainable processing and utilization of cottonseed hulls (CSH) and cotton stalk (CS) through a microbial biotechnological approach. The cotton biomass induced superior xylanase synthesis in bacteria (Bacillus pumilus and Bacillus licheniformis) as revealed by biomass compositional analysis, carbon content, and fermentation optimization. Furthermore, the bio-bleaching efficiency of bacterial xylanase on CS pulp was ascertained by determining pulp particle size, color, brightness, spectral attributes, and thermal behavior. Results revealed that both CS and CSH are chiefly lignocellulosic material, comprised of alpha-cellulose (45.23 +/- 2.32 and 38.83 +/- 0.21%), hemicelluloses (20.63 +/- 1.74 and 24.53 +/- 0.05%), and lignin (19.67 +/- 0.66 and 18.47 +/- 0.37%). The optimized cultural conditions (carbon source, 0.5% CSH; inoculum rate, 1.0%; media pH, 7.0; temperature range, 35-40 degrees C; and N source, ammonium sulfate) favorably induced extracellular xylanase production (xylanase yield ranged between 44.41 and 718.36 IU/mL) in bacteria. Bio-bleaching of CS pulp using xylanase positively improved the particle size (14.83% increase over unbleached sample) and whiteness of pulp. The ISO brightness of bio-bleached pulp (14.70 +/- 0.65) was also substantially improved (16.04%) over the control (12.67 +/- 0.19). Spectral analysis revealed the stretching, vibration, and deformation of inter- and intramolecular bonds, indicating xylanase-mediated hemicellulose breakdown and pulp delignification. Thermogravimetric analysis showed altered thermal stability and behavior of pulp biomass owing to xylanase-mediated pre-bleaching step. For the first time, the study highlighted the optimized fermentation process for utilizing CSH as an economical substrate for the xylanase biosynthesis and bacterial xylanase-mediated bio-bleaching as a promising green and sustainable technology for CS and other agricultural biomass-based pulp and paper industries.