A novel, thermostable, alkalophilic beta-d-galactosidase (Mbgl) was isolated from a metagenome of geothermal springs in northern Himalayan region of India. Mbgl was 447 amino acids in size and had conserved catalytic residues E170 and E358, indicating that it belonged to family 1 of glycosyl hydrolases showing maximum homology (89 %) with uncharacterized beta-galactosidase of Eubacterium, Meiothermus ruber DSM1279. Temperature and pH optima of Mbgl were 65 A degrees C and 8.0 respectively, and it retained 80 % activity even at pH 10.0. Mbgl was active as a homotetramer, recognized beta-(1,4)-d-galactoside as the preferred glycosidic bond, and preferentially hydrolyzed pNPgal with K (m) 3.33 mM and k (cat) 2,000 s(-1). It displayed high transglycosylation activity with wide acceptor specificity including hexoses and pentoses leading to the formation of prebiotic galacto-oligosaccharides whereas its lactose hydrolysis potential was low.