The structural gene for sphingomyelinase (SMase) from Streptomyces griseocarneus, was introduced into Streptomyces lividans using a shuttle vector, pUC702, for Escherichia coli/S. lividans. High-level secretory production of SMase was achieved using the promoter, signal sequence and terminator regions of phospholipase D from Streptoverticillium cinnamoneum. The transformant constitutively expressed a high specific activity of SMase extracellularly during batch culture. Maximum SMase activity (555 +/- A 114 U/mg protein) was with 1.75 M MgCl2 which was about 50-fold more than that with 10 mM MgCl2.