Aspergillus nidulans possessed an ␣-glucosidase with strong transglycosylation activity. The enzyme, designated ␣-glucosidase B (AgdB), was purified and characterized. AgdB was a heterodimeric protein comprising 74-and 55-kDa subunits and catalyzed hydrolysis of maltose along with formation of isomaltose and panose. Approximately 50% of maltose was converted to isomaltose, panose, and other minor transglycosylation products by AgdB, even at low maltose concentrations. The agdB gene was cloned and sequenced. The gene comprised 3,055 bp, interrupted by three short introns, and encoded a polypeptide of 955 amino acids. The deduced amino acid sequence contained the chemically determined N-terminal and internal amino acid sequences of the 74-and 55-kDa subunits. This implies that AgdB is synthesized as a single polypeptide precursor. AgdB showed low but overall sequence homology to ␣-glucosidases of glycosyl hydrolase family 31. However, AgdB was phylogenetically distinct from any other ␣-glucosidases. We propose here that AgdB is a novel ␣-glucosidase with unusually strong transglycosylation activity.␣-Glucosidases (EC 3.2.1.20) catalyze liberation of glucose from nonreducing ends of ␣-glucosides, ␣-linked oligosaccharides, and ␣-glucans. They show diverse substrate specificities; some prefer ␣-linked di-, oligo-, and/or polyglucans, while others preferentially hydrolyze heterogeneous substrates such as aryl glucosides and sucrose (1, 5). Theoretically ␣-glucosidase is capable of catalyzing transglycosylation, since it is a retaining glycosyl hydrolase (GH) (2), and some ␣-glucosidases indeed exhibit clear transglycosylation activity. For example, Aspergillus niger ␣-glucosidase catalyzes formation of ␣-1,6 glucosidic linkages in addition to hydrolysis, resulting in production of isomaltose (6-O-␣-D-glucopyranosyl-D-glucopyranose) and panose (6-O-␣-glucopyranosyl-maltose) from maltose (3,15,21). Buckwheat ␣-glucosidase produces kojibiose (2-O-␣-glucosyl-glucose), nigerose (3-O-␣-glucosyl-glucose), maltose, and isomaltose from soluble starch (1), and ␣-glucosidases from Bacillus stearothermophilus and brewer's yeast produce oligosaccharides consisting of ␣-1,3, ␣-1,4, and ␣-1,6 linkages (13). Transglycosylation activity of the ␣-glucosidases has been applied in industries to produce isomaltooligosaccharides and also to conjugate sugars to biologically useful materials, aiming to improve their chemical properties and physiological functions (18, 33).The main physiological role of most exo-type glycosidases such as ␣-glucosidase is to produce monosaccharides that are utilized as carbon and energy sources. However, transglycosylation activities of exo-type glycosidases sometimes play physiologically important roles in gene regulation involved in carbohydrate utilization. A well-known example is induction of the lac operon in Escherichia coli. The physiological inducer of the operon, allolactose (6-O--D-galactopyranosyl-D-glucose), is synthesized from lactose by transglycosylation activity of -galactosidase encoded by ...