Assimilation of DFA III by Arthrobacter sp. H65-7 was found to consist of two sequential enzyme steps, hydrolysis of DFA III to inulobiose (1-O-β-d-fructofuranosyl-d-fructopyranose) and inulobiose to fructose, that is, α-(2 → 3′) and β-(2′ → 1) fructosidic linkages were split separately. The enzyme catalyzing the first step, named DFA III hydrolysis enzyme (DFA IIIase), has been purified from the cell-free extracts of Arthrobacter sp. H65-7 to an electrophoretically pure state by heat-treatment, ammonium sulfate fractionation, and chromatographies on DEAE-Toyopearl 650M, Butyl-Sepharose 4B and TSKgel G3000SWxl, and Biophoresis III. The molecular weight of the purified enzyme was estimated to be 125,000 by gel filtration, and 61,000 by SDS–polyacrylamide gel electrophoresis. The enzyme showed the highest activity at pH 6.0 and 45°C, and was stable from pH 4.5 to 10.0 and up to 60°C. The Km of this enzyme for DFA III was 12.5 mm. The enzyme also catalyzed the reverse reaction, inulobiose to DFA III.