Beta-glucosidase II (Bgl II), encoded by the betaglu2 gene of the thermo-tolerant yeast Pichia etchellsii, was purified from recombinant Escherichia coli pBG22:JM109. The enzyme had a molecular mass of 176 kDa and was a dimer with an apparent subunit mass of 83 kDa. It exhibited broad substrate specificity and hydrolyzed beta-linked gluco-disaccharides and oligosaccharides, salicin, and cyanogenic glucoside amygladin. The unusually high hydrolytic activity of 7,680 units min(-1) g(-1) protein was obtained on sophorose. Competition experiments performed using differently linked beta-disaccharides indicated these to be hydrolyzed at the same active site. Transglycosylation activity leading to the biosynthesis of several disaccharides and oligosaccharides was observed. The enzyme was placed in glycosyl hydrolase family 3, based on a statistical approach using amino acid composition data. The involvement of His as a catalytically important residue was confirmed by diethylpyrocarbonate modification. Pre-incubation of the purified enzyme with 5 mM p-nitrophenyl-beta-D-glucoside offered 2.5-fold higher residual activity compared with unbound enzyme, indicating protection at the active site. The feasibility of this enzyme as a biocatalyst of choice for the synthesis of glyco-conjugates is discussed.