Abstract Inoculation of a synthetic medium containing dextran with soil resulted in the accumulation of several Bacillus species, which were isolated and characterized as B. subtilis and B. megatherium. These dextran-splitting bacilli did not produce an extracellular dextranase, in contrast to several other micro-organisms reported in the literature, which break down dextran outside the cell into comparatively large fragments (oligosaccharides of the isomaltose series). The Bacillus enzyme was found in the cell extract after disruption of the cells. The action of this enzyme on dextran liberated D-glucose as the sole product of hydrolysis. Isomaltodextrins were likewise rapidly hydrolysed to give only D-glucose. The mechanism of action of the Bacillus dextranase involves endwise cleavage of D-glucose residues from the terminal groups, leaving the rest of the dextran molecule intact.