Alkalophylic bacilli that produce cyclodextringlycosyltransferase (CGTase) were isolated from Brazilian soil, with a scheme of two plating steps. In the first step, the bacterial isolate forms a halo in the cultivation medium that contains gamma-cyclodextrin (CD) complexing dyes. The CGTase of an isolate was purified 157-fold by biospecific affinity chromatography, with beta-CD showing a mol wt of 77,580 Daltons. It produces a gamma- to beta-CD ratio of 0.156 and a small amount of alpha-CD, using maltodextrin 10% as substrate, at 50 degrees C, pH 8.0 and 22 h reaction time, reaching 21.4% conversion of the substrate to cyclodextrins. In the second screening step, the isolates chosen give larger halos with beta-CD complexing dyes, and smaller halos with beta-CD complexing dyes, leading to a 30% improvement in gamma-CD selectivity, although at lower total yield for cyclodextrins (11.5%).