||Activity assays were conducted on five Cellulomonas strains, including C. biazotae, C. cartea, C. fimi, C. flavigena, and C. uda, to search for a suitable candidate of which a cellobiase gene encoding a secretory enzyme might be cloned. All these five strains were found to express activities on both MUG and pNFG substrates. When they were assayed for secretory pNPG activities in time-course studies, C. biazotea and C.flavigena were shown to produce increasing levels of activity during the early and mid log phases of growth. Concentrated supernatants of these two strains were further shown to be active on cellobiose substrate. Based on the these findings, C. biazotea and C. flavigene were selected as the donor hosts for the cloning of the cellobiase gene. The chromosomal DNAs of the two Cellulomonas species were partially digested with Pst I, and the restricted fragments were shotgun cloned into the excretion vector pM that had been cut with Pst I. E. coli transformants of the two types of recombinant plasmids were screened for activity on the MUG substrate. Out of the 5,000 screened clones, 25 of them gave a positive result. When these clones were tested for growth in liquid medium containing cellobiose as the sole carbon source and along with IFTG induction, only one of them carrying C. biazotea recombinant DNA showed positive growth. The construct of this transformant was designated pBZ4.7. E. coli JMlOl containing pBZ4.7 was tested for the production of secretory cellobiase. Fractionated samples of an IPTG induced culture of it were monitored for proteins and tested for pNPG and cellobiase activities, as well as those of glucose-6-phosphate dehydrogenase and β-lactamase. The results pointed to the fact that the β-glucosidase was a cellobiase and it was secretory and excretory in E. coli. The cellobiase gene insert in pBZ4.7 was shown by restriction analysis to consist of two Pst I fragments which were 0.75 kb and 3.95 kb in length, . respectively. These two fragments were shown to be contiguous on the C. biazotea genome by Southern hybridization. A deletant derivative of pBZ4.7, designated pBZ4.7δP, was constructed by deleting the 0.75-kb Pst I fragment from the insert. This deletant mutant, when compared with pBZ4.7, was found to express a very low level of cellobiase activity in E. coli. However, when pBZ4.7 was compared with a frameshifted mutant, pBZ4.7KS, for cellobiase expression, both of them were shown to express the same level of activity. The above findings supported that the 0.75-kb fragment was important for cellobiase expression, and that the cellobiase enzyme might employ its own signal peptide for secretion in E. coli. DNA sequencing performed on a portion of the 0.75-kb fragment has revealed that it contains a high G+C content, which is typical of Cellulomonas DNA.