A new enzyme capable of hydrolyzing chitobiose, which is an induced enzyme, was purified to apparent homogeneity from the culture filtrate of Nocardia orientalis IFO 12806. Biospecific affinity chromatography on chitotriitol-Sepharose CL-4B was effective for purification of this enzyme. It is clearly demonstrated that the enzyme is an exo-hydrolase, removing single glucosamine residues from the nonreducing terminal of a sequence of beta-(1----4)-linked glucosamine chain, such as chitosan and chitooligosaccharides, and therefore characterized as an exo-beta-D-glucosaminidase. The enzyme was found to show maximum activity on chitotetraose, chitopentaose, and their corresponding alcohols and a slight decrease in rate on longer chain lengths of substrates. A significant decrease in rate was observed using p-nitrophenyl beta-D-glucosaminide and chitobiitol as substrates. In the hydrolysis of partially acetylated chitosans, the enzyme appeared to be effective in cleaving glucosamine from the GlcN beta 1----4GlcNAc beta 1----sequence as well as the GlcN beta 1----4GlcN beta 1----sequence. These observations suggest that the second residue from the terminal plays an important role in enzyme activity, but the enzyme permits the replacement of glucosamine at the second residue by N-acetylglucosamine.