Paenibacillus sp. 598K produces cycloisomaltooligosaccharides (cyclodextrans) from starch even in the absence of dextran. Cycloisomaltooligosaccharide glucanotransferase synthesizes cycloisomaltooligosaccharides exclusively from an alpha-(1 -> 6)-consecutive glucose chain consisting of at least four molecules. Starch is not a substrate of this enzyme. Therefore, we predicted that the bacterium possesses another enzyme system for extending alpha-(1 -> 6)-linked glucoses from starch, which can be used as the substrate for cycloisomaltooligosaccharide glucanotransferase, and identified the transglucosylation enzyme Ps6GT31A. We purified Ps6GT31A from the bacterial culture supernatant, cloned its corresponding gene, and characterized the recombinant enzyme. Ps6GT31A belongs to glycoside hydrolase family 31, and it liberates glucose from the non-reducing end of the substrate in the following order of activity: alpha-(1 -> 4)-> alpha-(1 -> 2)- > alpha-(1 -> 3)- > alpha-(1 -> 6)-glucobiose and maltopentaose > maltotetraose > maltotriose > maltose. Ps6GT31A catalyzes both hydrolysis and transglucosylation. The resulting transglucosylation compounds were analyzed by high-performance liquid chromatography and mass spectrometry. Analysis of the initial products by C-13 nuclear magnetic resonance spectroscopy revealed that Ps6GT31A had a strong alpha-(1 -> 4) to alpha-(1 -> 6) transglucosylation activity. Ps6GT31A elongated alpha-(1 -> 6)-linked glucooligosaccharide to at least a degree of polymerization of 10 through a successive transglucosylation reaction. Eventually, cycloisomaltooligosaccharide glucanotransferase creates cycloisomaltooligosaccharides using the transglucosylation products generated by Ps6GT31A as the substrates. Our data suggest that Ps6GT31A is the key enzyme to synthesize alpha-(1 -> 6)-glucan for cycloisomaltooligosaccharide production in dextran-free environments.