A truncated fragment of the cycloinulo-oligosaccharide fructanotransferase (CFTase) gene of Bacillus circulans MCI-2554 was fused to the prepro secretion sequence of the alpha-factor and expressed in Saccharomyces cerevisiae under the control of the 5' upstream region of the isocitrate lyase gene of Candida tropicalis (UPR-ICL). Efficiently secreted recombinant CFTase protein (yeast CFTase) was purified. Yeast CFTase consisted of three protein molecules, each of which had CFTase activity (yeast CFTase 1 [116 kDa], yeast CFTase 2 [117 kDa], and yeast CFTase 3 [116 kDa]). Yeast CFTase 2 was the major product of the expression system employed and was shown to be N glycosylated by endoglycosidase H treatment. Yeast CFTase 1 was N glycosylated but had a short truncation at its N terminus, while yeast CFTase 3 did not contain an N-glycosylated carbohydrate chain(s). Yeast CFTase 2 showed an optimum pH, an optimum temperature, and a pH stability similar to those of CFTase purified from B. circulans but exhibited a significant increase in thermostability. Production of yeast CFTase by the strain which had two copies of the CFTase gene integrated into its chromosomes reached 391 U per liter of culture at 120 h, which corresponded to 8.40 mg of protein per liter, by shake-flask cultivation.