A bacterium, Bacillus sp. GL1, produced constitutively the extracellular polysaccharide-degrading enzyme (gellan lyase) with a molecular mass of 140 kDa. A genomic DNA library of the bacterium was constructed in Escherichia coli using the cosmid vector, Charomid 9-36. The gene encoding the lyase was cloned by screening for a gellan-degrading phenotype in E. coli cells and the nucleotide sequence of the gene was determined. The gene contained an open reading frame consisting of 7425 base pairs coding a polypeptide with a molecular mass of 263 kDa. The polypeptide contained the same amino acid sequence as N-terminal amino acid sequence of the enzyme and exhibited no homology with any previously published protein sequences. E. coli cells transformed with the gene exhibited gellan lyase activity and produced a protein with a molecular mass of about 260 kDa intracellularly. The protein was purified and shown to have the closely similar enzymatic properties to those of the native enzyme from Bacillus sp. GL1 with respect to optimal pH and temperature for activity, substrate specificity, and the mode of enzyme action. These results suggest that, in Bacillus sp. GL1, gellan lyase is first produced as a huge precursor protein (263 kDa) and then the protein is posttranslationally processed into extracellular mature form (140 kDa) through excising C-terminal peptide of about 120 kDa.