A new beta-glucosidase from a novel strain of Terrabacter ginsenosidimutans (Gsoil 3082(T)) obtained from the soil of a ginseng farm was characterized, and the gene, bgpA (1,947 bp), was cloned in Escherichia coli. The enzyme catalyzed the conversion of ginsenoside Rb1 {3-O-[beta-D-glucopyranosyl-(1-2)-beta-D-glucopyranosyl]-20-O-[beta-D-glucopyranosyl-(1-6)-beta-D-glucopyranosyl]-20(S)-protopanaxadiol} to the more pharmacologically active rare ginsenosides gypenoside XVII {3-O-beta-D-glucopyranosyl-20-O-[beta-D-glucopyranosyl-(1-6)-beta-D-glucopyranosyl]-20(S)-protopanaxadiol}, gypenoside LXXV {20-O-[beta-v-glucopyranosyl-(1-6)-beta-D-glucopyranosyl]-20(S)-protopanaxadiol}, and C-K [20-O-(beta-D-glucopyranosyl)-20(S)-protopanaxadiol]. A BLAST search of the bgpA sequence revealed significant homology to family 3 glycoside hydrolases. Expressed in E. coli, beta-glucosidase had apparent K(m) values of 4.2 +/- 0.8 and 0.14 +/- 0.05 mM and V(max) values of 100.6 +/- 17.1 and 329 +/- 31 micromol x min(-1) x mg of protein(-1) against p-nitrophenyl-beta-D-glucopyranoside and Rb1, respectively. The enzyme catalyzed the hydrolysis of the two glucose moieties attached to the C-3 position of ginsenoside Rb1, and the outer glucose attached to the C-20 position at pH 7.0 and 37 degrees C. These cleavages occurred in a defined order, with the outer glucose of C-3 cleaved first, followed by the inner glucose of C-3, and finally the outer glucose of C-20. These results indicated that BgpA selectively and sequentially converts ginsenoside Rb1 to the rare ginsenosides gypenoside XVII, gypenoside LXXV, and then C-K. Herein is the first report of the cloning and characterization of a novel ginsenoside-transforming beta-glucosidase of the glycoside hydrolase family 3.