Aims: To isolate, clone and express a novel phytase gene (phy) from Bacillus sp. in Escherichia coli; to recover the active enzyme from inclusion bodies; and to characterize the recombinant phytase. Methods and Results: The molecular weight of phytase was estimated as 40 kDa on SDS-polyacrylamide gel electrophoresis. A requirement of Ca2+ ions was found essential both for refolding and activity of the enzyme. Bacillus phytase exhibited a specific activity of 16 U mg(-1) protein; it also revealed broad pH and temperature ranges of 5.0 to 8.0 and 25 to 70 degrees C, respectively. The K-m value of phytase for hydrolysis of sodium phytate has been determined as 0.392 mmol l(-1). The activity of enzyme has been inhibited by EDTA. The enzyme exhibited ample thermostability upon exposure to high temperatures from 75 to 95 degrees C. After 9 h of cultivation of transformed E. coli in the bioreactor, the cell biomass reached 26.81 g wet weight (ww) per l accounting for 4289 U enzyme activity compared with 1.978 g ww per l producing 256 U activity in shake-flask cultures. In silico analysis revealed a beta-propeller structure of phytase. Conclusions: This is the first report of its kind on the purification and successful in vitro refolding of Bacillus phytase from the inclusion bodies formed in the transformed E. coli. Significance and Impact of the Study: Efficient and reproducible protocols for cloning, expression, purification and in vitro refolding of Bacillus phytase enzyme from the transformed E. coli have been developed. The novel phytase, with broad pH and temperature range, renaturation ability and substrate specificity, appears promising as an ideal feed supplement. Identification of site between 179th amino acid leucine and 180th amino acid asparagine offers scope for insertion of small peptides/domains for production of chimeric genes without altering enzyme activity.