Aspergillus nidulans possessed an alpha-glucosidase with strong transglycosylation activity. The enzyme, designated alpha-glucosidase B (AgdB), was purified and characterized. AgdB was a heterodimeric protein comprising 74- and 55-kDa subunits and catalyzed hydrolysis of maltose along with formation of isomaltose and panose. Approximately 50% of maltose was converted to isomaltose, panose, and other minor transglycosylation products by AgdB, even at low maltose concentrations. The agdB gene was cloned and sequenced. The gene comprised 3,055 bp, interrupted by three short introns, and encoded a polypeptide of 955 amino acids. The deduced amino acid sequence contained the chemically determined N-terminal and internal amino acid sequences of the 74- and 55-kDa subunits. This implies that AgdB is synthesized as a single polypeptide precursor. AgdB showed low but overall sequence homology to alpha-glucosidases of glycosyl hydrolase family 31. However, AgdB was phylogenetically distinct from any other alpha-glucosidases. We propose here that AgdB is a novel alpha-glucosidase with unusually strong transglycosylation activity.