The gene coding for a novel esterase which stereoselectively hydrolyzes the (+)-trans (1R,3R) stereoisomer of ethyl chrysanthemate was cloned from Arthrobacter globiformis SC-6-98-28 and overexpressed in Escherichia coli. The cellular content of the active enzyme reached 33% of the total soluble protein in the recombinant E. coli JM105 cells and 5.6 g/liter of culture by high-density cell cultivation. The hydrolytic activity of the recombinant E. coli cells for ethyl chrysanthemate reached 605 mumol of chrysanthemic acid per min per g of dry cells, which is approximately 2,500-fold higher than that of A. globiformis cells. The stereoselective hydrolysis by the recombinant E. coli cells was efficient at substrate concentrations of up to 40% by removing the produced chrysanthemic acid by ultrafiltration. The (+)-trans-chrysanthemic acid produced had 100% optical purity. The amino acid sequence of the esterase was found to be similar to that of several class C beta-lactamases, D,D-carboxypeptidase, D-aminopeptidase, 6-aminohexanoate-dimer hydrolase, and Pseudomonas esterase. The sequence comparison also suggested that the Ser-X-X-Lys motif in the esterase was at the active site of the enzyme.