Thermostable N-acylamino acid racemase from Amycolatopsis sp. TS-1-60, a rare actinomycete strain selected for its ability to grow on agar plates incubated at 40 degrees C, was purified to homogeneity and characterized. The relative molecular mass (M(r)) of the native enzyme and the subunit was estimated to be 300 000 and 40 000 on gel filtration chromatography and sodium dodecyl sulfate-polyacrylamide gel electrophoresis respectively. The isoelectric point (pI) of the enzyme was 4.2. The optimum temperature and pH were 50 degrees C and 7.5 respectively. The enzyme was stable at 55 degrees C for 30 min. The enzyme catalyzed the racemization of optically active N-acylamino acids such as N-acetyl-L- or D-methionine, N-acetyl-L-valine, N-acetyl-L-tyrosine and N-chloroacetyl-L-valine. In addition, the enzyme also catalyzed the racemization of the dipeptide L-alanyl-L-methionine. By contrast, the optically active amino acids, N-alkyl-arnino acids and methyl and ethyl ester derivatives of N-acetyl-D- and L-methionine were not racemized. The apparent K-m values for N-acetyl-L-methionine and N-acetyl-D-methionine were calculated to be 18.5 mM and 11.3 mM respectively. The enzyme activity was markedly enhanced by the addition of divalent metal ions such as Co2+, Mn2+ and Fe2+ and was inhibited by addition of EDTA and P-chloromercuribenzoic acid. The similarity between the NH2-terminal amino acid sequence of the enzyme and that of Streptomyces atratus Y-53 [Tokuyama et al. (1994) Appl Microbiol Biotechnol 40:835-840] was above 80%.