A novel aminoacylase was purified to homogeneity from culture broth of Streptomyces mobaraensis, as evidenced by SDS-polyacrylamide gel electrophoresis (PAGE). The enzyme was a monomer with an approximate molecular mass of 100 kDa. The purified enzyme was inhibited by the presence of 1,10-phenanthroline and activated by the addition of Co2+. It was stable at temperatures of up to 60 degrees C for 1 h at pH 7.2. It showed broad substrate specificity to N-acetylated L-amino acids. It catalyzed the hydrolysis of the amide bonds of various N-acetylated L-amino acids, except for Nepsilon-acetyl-L-lysine and N-acetyl-L-proline. Hydrolysis of N-acetyl-L-methionine and N-acetyl-L-histidine followed Michaelis-Menten kinetics with K(m) values of 1.3+/-0.1 mM and 2.7+/-0.1 mM respectively. The enzyme also catalyzed the deacetylation of 7-aminocephalosporanic acid (7-ACA) and cephalosporin C. Moreover, feruloylamino acids and L-lysine derivatives of ferulic acid derivatives were synthesized in an aqueous buffer using the enzyme.