The gene encoding ribonuclease HII from Bacillus stearothermophilus was cloned and expressed in Escherichia coli. The overproduced protein, Bst-RNase HII, was purified and biochemically characterized. Bst-RNase HII, which consists of 259 amino acid residues, showed the highest amino acid sequence identity (50.2%) to Bacillus subtilis R-Nase HII. Like B. subtilis RNase HII, it exhibited Mn2+-dependent RNase H activity. It was, however, more thermostable than B. subtilis RNase HII. When the Bst-RNase HII amino acid sequence is compared with that of Thermococcus kodakaraensis RNase HII, to which it shows 29.8% identity, 30 residues are observed to be truncated from the C-terminus and there is an extension of 71 residues at the N-terminus. The C-terminal truncation results in the loss of the alpha9 helix, which is rich in basic amino acid residues and is therefore important for substrate binding. A truncated protein, Delta59-Bst-RNase HII, in which most of the N-terminal extension was removed, completely lost its RNase H activity. Surface plasmon resonance analysis indicated that this truncated protein did not bind to the substrate. These results suggest that the N-terminal extension of Bst-RNase HII is important for substrate binding. Because B. subtilis RNase HII has an N-terminal extension of the same length and these extensions contain a region in which basic amino acid residues are clustered, the Bacillus enzymes may represent a novel type of RNase H which possesses a substrate-binding domain at the N-terminus.