The trehalose (alpha-D-glucopyranosyl-[1,1]-alpha-D-glucopyranose) biosynthesis genes MhMTS and MhMTH, encoding a maltooligosyltrehalose synthase (MhMTS) and a maltooligosyltrehalose trehalohydrolase (MhMTH), respectively, have been cloned from the hyperthermophilic archaebacterium Metallosphaera hakonesis. The ORF of MhMTS is 2,142 bp long, and encodes 713 amino acid residues constituting a 83.8 kDa protein. MhMTH is 1,677 bp long, and encodes 558 amino acid residues constituting a 63.7 kDa protein. The deduced amino acid sequences of MhMTS and MhMTH contain four regions highly conserved for MTSs and three for MTHs that are known to constitute substrate-binding sites of starch-hydrolyzing enzymes. Recombinant proteins obtained by expressing the MhMTS and MhMTH genes in E. coli catalyzed a sequential reaction converting maltooligosaccharides to produce trehalose. Optimum pH of the MhMTS/MhMTH enzyme reaction was around 5.0 and optimum temperature was around 70 degrees C. Trehalose-producing activity of the MhMTS/ MhMTH was notably stable, retaining 80% of the activity after preincubation of the enzyme mixture at 70 degrees C for 48 h, but was gradually abolished by incubating at above 85 degrees C. Addition of thermostable 4-alpha-glucanotransferase increased the yield of trehalose production from maltopentaose by 10%. The substrate specificity of the MhMTS/MhMTH-catalyzed reaction was extended to soluble starch, the most abundant maltodextrin in nature.