The exo-beta-1,3-glucanase of Candida albicans (Exg) has a marked specificity for beta-1,3-glucosidic linkages as judged by the kinetic constants for p-nitophenyl beta-glucoside, beta-linked disaccharides of glucose (laminaribiose, gentiobiose, and cellobiose), oligosaccharides of the laminari series, laminarin and pustulan. The kcat/Km ratios for a series of laminari oligosaccharides from -biose to -heptaose showed that Exg has an extended substrate-binding site which contains at least five binding sites for sugar residues. Binding at position +2 (the third sugar residue) increases the kcat twofold while positions +3 and +4 lower the Km value further and thereby increase the catalytic efficiency. Exg catalyses an efficient transglucosylation reaction with high concentrations of laminari-oligosaccharides which specifically form beta-1,3 linkages and with yields up to 50%. The rate of the transglucosylation is concentration-dependent and can be more than 10 times faster than the hydrolytic reaction with excess donor substrates such as laminaritriose and laminarihexaose. The kinetics of Exg and the predicted substrate-binding site for up to five sugar residues are consistent with a recent structural analysis of the enzyme-binding site.