Numerical simulations and experimental validation were performed to understand the effects of hydrodynamics on pellet formation and cellulase production by filamentous T. reesei. The constructed model combined a steady‐state multiple reference frame (MRF) approach describing mechanical mixing, oxygen mass transfer, and non‐Newtonian flow field with a transient sliding mesh approach and kinetics of oxygen consumption, pellet formation, and enzyme production. The model was experimentally validated at various agitation speeds in a two‐impeller Rushton turbine fermentor. Results from simulation and experimentation showed that higher agitation speeds led to increases in the pellet diameter and the proportion of pelletized (vs. filamentous) forms of the biomass. It also led to increase in dissolved oxygen mass transfer rate in shear‐thinning fluid and cellulase productivity. The extent of these increases varied considerably among agitation speeds. Pellet formation and morphology were presumably affected within a viscosity‐dependent shear‐rate range. Cellulase activity and cell viability were shown to be sensitive to impeller shear. A maximum cellulase activity of 3.5 IU/mL was obtained at 400 rpm, representing a twofold increase over that at 100 rpm. Biotechnol. Bioeng. 2012; 109:1755–1768. © 2012 Wiley Periodicals, Inc.