An agarolytic bacterium was isolated from soil in Gifu prefecture, Japan, and identified as Bacillus sp. strain MK03. The strain secreted neoagarooligosaccharide hydrolase into the culture medium. The enzyme was purified 49.7-fold from the culture fluid by ammonium sulfate precipitation and anion-exchange and gel-filtration column chromatographic methods. The purified enzyme appeared as a single band on polyacrylamide gel electrophoresis (PAGE) and sodium dodecyl sulfate (SDS)-PAGE. Estimations of the molecular mass by gel filtration and SDS-PAGE gave values of 320 kDa and 42 kDa, respectively, indicating that the enzyme is octametric. The enzyme cleaved the alpha-1,3 linkage in neoagarobiose to produce 3,6-anhydro-L-galactose and D-galactose. It also selectively cleaved the alpha-1,3 linkage at the nonreducing end in neoagarotetraose or neoagarohexaose to give 3,6-anhydro-L-galactose and agarotriose or agaropentaose. The optimum temperature and pH for the enzyme were 30degreesC and 6.1, respectively. The N-terminal amino acid sequence showed no homology to sequences of other known neoagarooligosaccharide hydrolases and agarases.