The breakdown of plant biomass to simple sugars is essential for the production of second-generation biofuels and high-value bioproducts. Currently, enzymes produced from filamentous fungi are used for deconstructing plant cell wall polysaccharides into fermentable sugars for biorefinery applications. A post-translational N-terminal pyroglutamate modification observed in some of these enzymes occurs when N-terminal glutamine or glutamate is cyclized to form a five-membered ring. This modification has been shown to confer resistance to thermal denaturation for CBH-1 and EG-1 cellulases. In mammalian cells, the formation of pyroglutamate is catalyzed by glutaminyl cyclases. Using the model filamentous fungus Neurospora crassa, we identified two genes (qc-1 and qc-2) that encode proteins homologous to mammalian glutaminyl cyclases. We show that qc-1 and qc-2 are essential for catalyzing the formation of an N-terminal pyroglutamate on CBH-1 and GH5-1. CBH-1 and GH5-1 produced in a Δqc-1 Δqc-2 mutant, and thus lacking the N-terminal pyroglutamate modification, showed greater sensitivity to thermal denaturation, and for GH5-1, susceptibility to proteolytic cleavage. QC-1 and QC-2 are endoplasmic reticulum (ER)-localized proteins. The pyroglutamate modification is predicted to occur in a number of additional fungal proteins that have diverse functions. The identification of glutaminyl cyclases in fungi may have implications for production of lignocellulolytic enzymes, heterologous expression, and biotechnological applications revolving around protein stability. IMPORTANCE:Pyroglutamate modification is the post-translational conversion of N-terminal glutamine or glutamate into a cyclized amino acid derivative. This modification is well studied in animal systems but poorly explored in fungal systems. In Neurospora crassa, we show that this modification takes place in the ER and is catalyzed by two well-conserved enzymes, ubiquitously conserved throughout the fungal kingdom. We demonstrate that the modification is important for the structural stability and aminopeptidase resistance of CBH-1 and GH5-1, two important cellulase enzymes utilized in industrial plant cell wall deconstruction. Many additional fungal proteins predicted in the genome of N. crassa and other filamentous fungi are predicted to carry an N-terminal pyroglutamate modification. Pyroglutamate addition may also be a useful way to stabilize secreted proteins and peptides, which can be easily produced in fungal production systems.