A novel beta-galactosidase (beta-gal) gene was cloned from Bacillus circulans ATCC 31382. The coding region was 1,758 bp and encoded a polypeptide of 586 amino acids with a deduced molecular mass of 66,888. Active staining for beta-gal showed that B. circulans ATCC 31382 produced three beta-gal isozymes. Two of these were detected in Biolacta N5 (Daiwakasei Co.), but the product of this novel gene corresponded to the one not contained in Biolacta N5. The novel beta-gal showed the highest amino acid sequence identity (43.3%) with a beta 1-->3 > 1-->4 galactosidase from Xanthomonas manihotis and was also highly similar to beta-gals from animals, plants, and fungi. This suggests an evolutionary relationship between this novel gene and those of eukaryotic origins. One of the two B. circulans beta-gals, the nucleotide sequences of which are available in the GenBank, was 20% identical to the novel beta-gal. Other bacterial beta-gals showed little or no similarity. We propose that this novel beta-gal be called B. circulans beta-gal-3, and the gene be called bgaC.