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A Gram-positive poly(3-hydroxybutyrate) (PHB)-degrading bacterial strain was isolated from compost. This organism, identified as Bacillus megaterium N-18-25-9, produced a clearing zone on opaque NB-PHB agar, indicating the presence of extracellular PHB depolymerase. A PHB depolymerase gene, PhaZ(Bm), of B. megaterium N-18-25-9 was cloned and sequenced, and the recombinant gene product was purified from Escherichia coli. The N-terminal half region of PhaZ(Bm) shared significant homologies with a catalytic domain of other PHB depolymerases. Although the C-terminal half region of PhaZ(Bm) showed no significant similarity with those of other PHB depolymerases, that region was necessary for the PHB depolymerase activity. Therefore, this enzyme's domain structure is unique among extracellular PHB depolymerase domain structures. The addition of PHB to the medium led to a sixfold increase in PhaZ(Bm) mRNA, while the presence of glucose repressed PhaZ(Bm) expression. The maximum activity was observed at pH 9.0 at 65 degrees C.