A xylanase gene, xynX, of Clostridium thermocellum had one thermostabilizing domain (TSD) between the signal peptide sequence and the catalytic domain (CD). The TSD of a truncated xylanase gene, xynX'(TSD-CD), was transpositioned from the N terminus to the C terminus of the CD by overlapping PCRs, and a modified product, xynX'(CD-TSD), was constructed. XynX'(TSD-CD) had a higher optimum temperature (70 degrees C versus 65 degrees C) and was more thermostable (residual activity of 68% versus 46% after a 20-min preincubation at 70 degrees C) than the one without the TSD, XynX'(CD). However, the domain-transpositioned enzyme, XynX'(CD-TSD), showed a lower optimum temperature (30 degrees C) and thermostability (20%) than XynX'(CD). Both XynX'(TSD-CD) and XynX'(CD-TSD) showed significantly higher binding capacity toward xylan than XynX'(CD), and the domain transposition did not cause any change in the binding ability. XynX'(TSD-CD) and XynX'(CD-TSD) also showed considerable binding to lichenan but not to carboxymethyl cellulose and laminarin. XynX'(TSD-CD) and XynX'(CD-TSD) had higher activities for insoluble xylan than XynX'(CD), while XynX'(CD) was more active against soluble xylan than XynX'(TSD-CD) and XynX'(CD-TSD). These results indicate that the TSD of XynX has dual functions, xylan binding and thermostabilization, and the domain should also be classified as a xylan-binding domain (XBD). The binding capacity of the XBD was not affected by domain transpositioning within the gene.