Transglutaminase (TGase) is an important industrial enzyme that catalyzes the cross-linking of proteins. In this study, the N-terminal residues were deleted and substituted to improve the activity and thermostability of Streptomyces hygroscopicus TGase. Seven N-terminal residues of TGase were chosen to be deleted individually. The mutated TGase missing the first four residues showed an increase in specific activity of 32.92%. The fifth residue (E5) in the N-terminus was then selected for substitution with the 19 other amino acids. The mutant replacing the fifth residue with an aspartic acid exhibited a 1.85-fold higher specific activity and a 2.7-fold longer half-life at 50 degrees C when compared with the wild-type enzyme. The melting temperature of the mutated TGase increased from 68.9 to 79.1 degrees C by circular dichroism spectroscopy analysis. This study showed that substitution combined with deletion of the N-terminal amino acids could enhance the activity and thermostability of TGase. (C) 2012 Elsevier Ltd. All rights reserved.