The lacS gene from the extremely thermoacidophilic archaebacterium Sulfolobus solfataricus encodes an enzyme with beta-galactosidase activity that, like other enzymes from this organism, is exceptionally thermophilic (optimal activity above 90 degrees C), thermostable, and resistant to common protein denaturants and proteases. Expression of the gene in mesophilic hosts is needed to uncover the molecular nature of these features. We have obtained expression of beta-galactosidase in Saccharomyces cerevisiae under the control of the galactose-inducible upstream activating sequence of the yeast genes GAL1 and GAL10. The expressed enzyme is identical in molecular mass, thermostability, and thermophilicity to the native enzyme, showing that these features are intrinsic to the primary structure of the enzyme. We also present a new promoter for the expression of thermostable proteins in S. cerevisiae. This promoter contains a sequence isolated from the nematode Caenorhabditis elegans that works as a strong, heat-inducible upstream activating sequence in S. cerevisiae. Transcription of the lacS gene under the control of this sequence is rapidly and efficiently induced by heat shock. The availability of a plate assay for monitoring beta-galactosidase activity in S. cerevisiae may allow screening for mutants affecting the efficiency and activity of the enzyme.