An expression library was generated by partial Sau3A digestion of genomic DNA from the thermophile Bacillus thermocatenulatus and cloning of DNA fragments in pUC18 in Escherichia coli DH5alpha. Screening for lipase activity identified a 4.5 kb insert in pUC18 which directed the production of lipase in E. coli DH5alpha. A subclone with a 2.2 kb insert was sequenced. The lipase gene codes for a mature lipase of 388 amino acid residues, corresponding to a molecular weight of 43 kDa. As in other Bacillus lipases, an Ala replaces the first Gly in the conserved pentapeptide Gly-X-Ser-X-Gly found in most lipases. The region upstream of the lipase gene contains a Bacillus promoter which directs the expression of lipase in E. coli DH5alpha. The expressed lipase was isolated and purified 312-fold to homogeneity. N-terminal sequencing of the purified lipase revealed a correct cleavage of the preprotein in E. coli DH5alpha. Maximum activity was found at pH 8.0-9.0 with tributyrin and olive oil as substrates and at 60-70 degrees C with p-NPP and olive oil as substrates. The lipase showed high stability at pH 9.0-11.0 and towards various detergents and organic solvents.