(S)-4-Chloro-3-hydroxybutyrate (CHB) is essential for the synthesis of biologically and pharmacologically important compounds. Rhizobium sp. DS-S-51 isolated from soil samples showed hydrolytic activity toward (R)-CHB in the racemate to (R)-3-hydroxy-gamma-butyrolactone (HL) under a simple composition of the reaction. Residual (S)-CHB was obtained with high optical purity. The gene encoding the enzyme concerned, designated CHB hydrolase, was isolated from DS-S-51, and the gene was highly expressed in Escherichia coli JM109. When the resolution of racemic methyl CHB (CHBM) as a substrate was performed using this recombinant cell, JM109 (pKK-R1), the hydrolytic activity was found to be 40-fold greater than that of DS-S-51, and the maximum concentration of the substrate added increased 2-fold. Moreover, (R)-HL was also obtained without decreasing the optical purity compared with that when (R)-CHBM was used as a substrate.