A novel strain of Bacillus stearothermophilus was isolated from samples of a potato-processing industry. Compared to known e-amylases from other B.stearothermophilus strains, the isolate was found to produce a highly thermostable e-amylase. The half-time of inactivation of this e-amylase was 5.1 h at 80°C and 2.4 h at 90°C. The temperature optimum for activity of the e-amylase was 70°C; the pH optimum for activity was relatively low, in the range 5.5-6.0. e-Amylase synthesis was regulated by induction and repression mechanisms. An inverse relationship was found between growth rate and e-amylase production. Low starch concentrations and low growth temperatures were favourable for enzyme production by the organism. At the optimal temperature for growth, 65°C, the e-amylase was a growth-associated enzyme. The optimal temperature for e-amylase production, however, was 40°C, with e-amylase increasing from 3.9 units (U)/ml to 143 U/ml when lowering the growth temperature from 65°C to 40°C. Maximal e-amylase production in a batch fermentor run at 65°C was 102 U/ml, which was 26-fold higher than in erlenmeyer flasks at 65°C. The dissolved 02 concentration was found to be a critical factor in production of the e-amylase.