A strain of Bacillus species which produced an enzyme named glutaryl 7-ACA acylase which converts 7 beta-(4-carboxybutanamido)cephalosporanic acid (glutaryl 7-ACA) to 7-amino cephalosporanic acid (7-ACA) was isolated from soil. The gene for the glutaryl 7-ACA acylase was cloned with pHSG298 in Escherichia coli JM109, and the nucleotide sequence was determined by the M13 dideoxy chain termination method. The DNA sequence revealed only one large open reading frame composed of 1,902 bp corresponding to 634 amino acid residues. The deduced amino acid sequence contained a potential signal sequence in its amino-terminal region. Expression of the gene for glutaryl 7-ACA acylase was performed in both E. coli and Bacillus subtilis. The enzyme preparations purified from either recombinant strain of E. coli or B. subtilis were shown to be identical with each other as regards the profile of sodium dodecyl sulfate-polyacrylamide gel electrophoresis and were composed of a single peptide with the molecular size of 70 kDa. Determination of the amino-terminal sequence of the two enzyme preparations revealed that both amino-terminal sequences (the first nine amino acids) were identical and completely coincided with residues 28 to 36 of the open reading frame. Extracellular excretion of the enzyme was observed in a recombinant strain of B. subtilis.