The xylanase gene of Bacillus circulans Teri-42 was cloned in both B. subtilis and Escherichia coli. The enzyme activity was almost 87% higher in B. subtilis (pBA7) than in E. coli (pAQ4). No cellulase activity was detected in the clones, B. subtilis (pBA7) and E. coli (pAQ4). Approximately 1120 U (80%) of the xylanase was secreted extracellularly by the clone B. subtilis (pBA7) as compared to 79 U (88%) excreted in E. coli (pAQ4). In B. subtilis (pBA7) the optimal xylanase activity was at pH 7.0 and 50 degrees C, which was the same as that of the parent B, circulans Teri-42. The recombinant xylanase in B. subtilis was more stable at higher temperatures than the parent B. circulans Teri-42. Purification of xylanase from the clone B. subtilis (pBA7) showed a 71 kDa polypeptide similar to that observed in B. circulans Teri-32.