1. Allantoin racemase is a novel enzyme which catalyzes the conversion of S(+)-and R(minus)-allantoin into the racemate. 2. The enzyme is present in Pseudomonas testosteroni, Pseudomonas putida and five biotypes of Pseudomonas fluorescens, but absent in a number of other Pseudomonas species. 3. The enzyme of Ps. testosteroni was purified 133-fold and exposes optimal activity at pH 8.0-8.2 and 50 degrees C. The enzyme is stable on heating for 15 min at 70 degrees C. 4. The enzyme appeared to be specific for the optical isomers of allantoin and no cofactors are involved in the reaction. 5. The optical aspecificity of allantoinase of Proteus rettgeri was reaffirmed.