To express efficiently the gene for extracellular beta-cyclodextrin glucanotransferase (beta-CGTase) of an alkalophilic Bacillus sp. #1011 using the E. coli promoters (tac, trp and PL promoters), three DNA fragments starting from the nucleotide positions +1, -18, and -48 of the translation initiation site of the gene were prepared and they were fused with the promoters. The maximum production of the enzyme, which was located mainly (90%) in the periplasm of the E. coli strain, was observed in the combination of the trp promoter and the beta-CGTase gene starting from the -48 nucleotide position in the presence of the inducer, IAA. The production of the enzyme was increased to 5.5 times that by the E. coli harboring the original plasmid and to approximately 3 times higher than the extracellular production of the enzyme by the parental Bacillus sp. #1011. The properties including the stability and optimum in the high pH range (pH 9) of the extracellular beta-CGTase from the alkalophilic Bacillus was conserved in the periplasmic enzymes of the E. coli cells.