An extracellular cyclodextrin glucanotranferase enzyme producing bacterium was isolated from the soil sample collected from Dumas Beach, Surat, India. The isolate was biochemically, physiologically, and phylogenetically characterized and was identified as a strain of Bacillus cereus group. The production of CGTase enzyme was optimized using various starch sources as substrates such as soluble starch, corn starch, potato starch, and rice starch. The enzyme production was found to be maximum when potato starch was added in the medium as substrate. The enzyme activity was measured as 5.132±0.25 U/mL in soluble starch, 8.423±0.33U/mL in corn starch, 14.329 ± 0.14 U/mL in potato starch, and 12.762 ± 0.09 U/mL in rice starch. The optimization of operating parameters such as pH, incubation temperature, potato starch concentration, incubation time, and agitation speed affecting enzyme production was further carried out using Response Surface Methodology, a combined method of statistical and mathematical approach. Central Composite Design was selected for optimization and the optimum levels of these parameters were identified as 8.8, 38°C, 2.2%, 50 h, and 200 rpm for pH, incubation temperature, potato starch concentration, incubation time, and agitation speed respectively. The final CGTase enzyme activity at the optimum levels of all the factors was measured to be as 38.313 U/mL which was in agreement with the software predicted enzyme activity of 39.901 U/mL and was more than twice the original activity. This study demonstrates the utility of strain SS2 for CGTase production which can be used as an alternative for commercial cyclodextrin production.