Yeast exo-beta-1,3-glucanase gene (EXG1) was expressed in Escherichia coli and the recombinant enzyme (Exg1p) was characterized. The recombinant Exglp had an apparent molecular mass of 45 kDa by SDS-PAGE and the enzyme has a broad specificity for beta-1,3-linkages as well as beta-1,6-linkages, and also for other beta-glucosidic linked substrates, such as cellobiose and pNPG. Kinetic analyses indicate that the enzyme prefers small substrates such as laminaribiose, gentiobiose, and pNPG rather than polysaccharide substrates, such as laminaran or pustulan. With a high concentration of laminaribiose, the enzyme catalyzed transglucosidation forming laminarioligosaccharides. The enzyme was strongly inhibited with high concentrations of laminaran.