l-Asparaginase II signal peptide was used for the secretion of recombinant cyclodextrin glucanotransferase (CGTase) into the periplasmic space of E. coli. Despite its predominant localisation in the periplasm, CGTase activity was also detected in the extracellular medium, followed by cell lysis. Five mutant signal peptides were constructed to improve the periplasmic levels of CGTase. N1R3 is a mutated signal peptide with the number of positively charged amino acid residues in the n-region increased to a net charge of +5. This mutant peptide produced a 1.7-fold enhancement of CGTase activity in the periplasm and significantly decreased cell lysis to 7.8% of the wild-type level. The formation of intracellular inclusion bodies was also reduced when this mutated signal peptide was used as judged by SDS-PAGE. Therefore, these results provide evidence of a cost-effective means of expression of recombinant proteins in E. coli.