Purification and properties of glucosyltransferase, which produces panose (Glc alpha 1-->6Glc alpha 1-->4Glc) and isomaltose (Glc alpha 1-->6Glc) from maltose (Glc alpha 1-->4Glc), are reported. The enzyme, from Aureobasidium, was purified to homogeneity by fractionations involving ammonium sulfate and DEAE-Cellulofine, S-Sepharose Fast Flow and Sephadex G-200 chromatography. Molecular mass of the enzyme was estimated to be 395 kDa by gel filtration. The enzyme was identified as a glycoprotein which contains 32% (w/w) carbohydrate. The optimum pH for the enzymatic reaction was 4.5-5.5 and the enzyme was stable over a pH range of 4-6. The optimum reaction temperature for the enzyme was 65 degrees C and the enzyme retained more than 96% activity at 60 degrees C after 15 min. The enzyme produced panose from maltose by means of a high efficiency (45.5%) glucosyl-transfer reaction. The enzyme was inhibited by metal ions, such as those of mercury, silver and aluminum, and also by organic inhibitors, especially nitrilotriacetic acid.