Trehalose (alpha,alpha-1,1-glucosyl-glucose) is essential for the growth of mycobacteria, and these organisms have three different pathways that can produce trehalose. One pathway involves the enzyme described in the present study, trehalose synthase (TreS), which interconverts trehalose and maltose. We show that TreS from Mycobacterium smegmatis, as well as recombinant TreS produced in Escherichia coli, has amylase activity in addition to the maltose <--> trehalose interconverting activity (referred to as MTase). Both activities were present in the enzyme purified to apparent homogeneity from extracts of Mycobacterium smegmatis, and also in the recombinant enzyme produced in E. coli from either the M. smegmatis or the Mycobacterium tuberculosis gene. Furthermore, when either purified or recombinant TreS was chromatographed on a Sephacryl S-200 column, both MTase and amylase activities were present in the same fractions across the peak, and the ratio of these two activities remained constant in these fractions. In addition, crystals of TreS also contained both amylase and MTase activities. TreS produced both radioactive maltose and radioactive trehalose when incubated with [(3)H]glycogen, and also converted maltooligosaccharides, such as maltoheptaose, to both maltose and trehalose. The amylase activity was stimulated by addition of Ca(2+), but this cation inhibited the MTase activity. In addition, MTase activity, but not amylase activity, was strongly inhibited, and in a competitive manner, by validoxylamine. On the other hand, amylase, but not MTase activity, was inhibited by the known transition-state amylase inhibitor, acarbose, suggesting the possibility of two different active sites. Our data suggest that TreS represents another pathway for the production of trehalose from glycogen, involving maltose as an intermediate. In addition, the wild-type organism or mutants blocked in other trehalose biosynthetic pathways, but still having active TreS, accumulate 10- to 20-fold more glycogen when grown in high concentrations (> or = 2% or more) of trehalose, but not in glucose or other sugars. Furthermore, trehalose mutants that are missing TreS do not accumulate glycogen in high concentrations of trehalose or other sugars. These data indicate that trehalose and TreS are both involved in the production of glycogen, and that the metabolism of trehalose and glycogen is interconnected.