Bacillus megaterium BM1, which produces penicillin G acylase (PGA), has been isolated. Gene encoding for PGA was cloned into E. coli MC1061 using pBR322 as the vector, obtaining a recombinant plasmid pBmPA4 containing 9.9 kb inserted DNA. Restriction map of the plasmid was analyzed. A pBmPA5 containing 4.9 kb was gained by deletion in vitro. Both pBmPA4 and pBmPA5 clones can be expressed in E.coli MC1061, and their expressions were induced by phenylacetic acid.