The gene encoding cyclomaltodextrinase (CDase) was cloned from alkalophilic Bacillus sp. I-5. The nucleotide sequence of the gene was determined and the physicochemical properties of the enzyme were investigated. The gene had an open reading frame of 559 amino acids with a predicted molecular weight of 64,884. The enzyme was purified to near homogeneity from Escherichia coli cells carrying a recombinant plasmid that contained the CDase gene. The enzyme hydrolyzed cyclomaltoheptaose (beta-CD) 13 times better than starch and 33 times better than pullulan, and it had transglycosylation activity. The enzyme also hydrolyzed acarbose, a pseudotetrasaccharide inhibitor of glucosidases. The enzyme was stabilized by Ca2+ and the activity was increased more than twofold in the presence of 5 mM EDTA. The optimum temperature of the enzyme was elevated from 40 to 50 degrees C by Ca2+ ion and the thermal activity was maintained more than 80% at 60 degrees C in the presence of Ca2+. Comparison of known amino acid sequences of several amylolytic enzymes with cyclomaltodextrinase activity, site-directed mutagenesis of the enzyme, and substrate specificity of the enzyme imply that the region between the third and the fourth conserved regions of the enzyme may play an important role in binding and degradation of cyclomaltodextrin.