In this study, a novel microbial transglutaminase (MTG) from Streptoinyces hygroscopicus WSH03-13 was applied in the processing of wool fabrics. The results indicated that MTG treatment could improve felting properties and decrease tensile strength loss of wool fabrics. For the wool fabrics used in this study, MTG treatment following chemical and protease pretreatment led to a 2.32% of area shrinkage and about 16% recovery in tensile strength based on the samples without MTG treatment. Moreover, a traditional resin treatment was compared with the role of MTG. Although the tensile strength of wool fabrics treated by MTG was lower than that treated by resin treatment, the fabrics had similar anti-felting properties, and the chemical oxygen demand of wastewater was only half of the latter. (c) 2006 Elsevier Inc. All rights reserved.