A new thermophilic inulinase-producing strain, which grows optimally at 60 degrees C, was isolated from soil samples with medium containing inulin as a sole carbon source. It was identified as a Bacillus smithii by analysis of 16s rDNA. Maximum inulinase yield of 135.2 IU/ml was achieved with medium pH7.0, containing inulin 2.0%, (NH(4))H(2)PO(4) 0.5%, yeast extract 0.5%, at 50 degrees C 200 rpm shaker for 72-h incubation. The purified inulinase from the extracellular extract of B. smithii T7 shows endoinulinolytic activity. The optimum pH for this endoinulinase is 4.5 and stable at pH range of 4.0-8.0. The optimum temperature for enzyme activity was 70 degrees C, the half life of the endoinulinase is 9 h and 2.5 h at 70 degrees C and 80 degrees C respectively. Comparatively lower Michaelis-Menten constant (4.17 mM) and higher maximum reaction velocity (833 IU/mg protein) demonstrate the endoinulinase's greater affinity for inulin substrate. These findings are significant for its potential industrial application.