This paper describes the characterization of an intracellular -glucosidase enzyme BGLII (Cel1a) and its gene (bgl2) from the cellulolytic fungus Trichoderma reesei (Hypocrea jecorina). The expression pattern of bgl2 is similar to that of other cellulase genes known from this fungus, and the gene would appear to be under the control of carbon catabolite repression mediated by the cre1 gene. The BGLII protein was produced in Escherichia coli, and its enzymatic properties were analyzed. It was shown to be a specific -glucosidase, having no -galactosidase side activity. It hydrolyzed both cellotriose and cellotetraose. BGLII exhibited transglycosylation activity, producing mainly cellotriose from cellobiose and sophorose and cellobiose from glucose. Antibodies raised against BGLII showed the presence of the enzyme in T. reesei cell lysates but not in the culture supernatant. Activity measurements and Western blot analysis of T. reesei strains expressing bgl2 from a constitutive promoter further confirmed the intracellular localization of this -glucosidase.Three categories of cellulases, endoglucanases (EC 3.2.1.4), cellobiohydrolases (EC 3.2.1.91), and -glucosidases (EC 3.2.1.21), are produced by saprophytic filamentous fungi for the degradation of insoluble cellulose into glucose. The endoglucanases mainly hydrolyze internal bonds in the cellulose polymer, producing new chain ends. The cellobiohydrolases, also known as exoglucanases, act processively from the chain ends, mainly producing cellobiose. This disaccharide and other short cello-oligomers are broken down to glucose by -glucosidases. Trichoderma reesei possesses one of the best-known cellulase enzyme systems, and it has served as a model for fungal cellulose degradation (see chapters in the work cited in reference 10). The cellobiohydrolases and the endoglucanases from this fungus have been especially extensively characterized. The -glucosidases of T. reesei, however, are less well characterized.T. reesei has been reported to produce extracellular (5), cell-wall-bound (38), and intracellular (15) -glucosidases. However, some data suggest that the extracellular and a major part of the cell-wall-bound activities could be due to the same enzyme (12, 26). The gene bgl1 (3), encoding an extracellular -glucosidase, has been isolated from T. reesei, and most probably it encodes the extracellular protein isolated previously (5). The corresponding BGLI enzyme has sequence similarity with other -glucosidases belonging to family 3 of the glycosyl hydrolases (3). It has been shown that by increasing the copy number of bgl1 and thus the amount of the BGLI enzyme in the cellulase mixture produced by T. reesei, the rate of reducing sugar formation from cellulose could be enhanced (3). This suggests that -glucosidase activity is limiting for total hydrolysis of cellulose in the cellulase mixture. The bgl1 gene has been deleted from T. reesei (8,21), and a minor amount of extracellular -glucosidase activity was still produced. This would indicate that there are...