Microorganisms producing xylanase were screened for the enzymatic production of xylo-oligosaccharides from xylan. One of the bacteria isolated fi om compost produced an endoxylanase extracellularly. The bacterium was identified as Bacillus sp. according to its taxonomic characteristics examined. Xylanase production reached upto 5 U/ml after 22 h of culture in LB medium at 30 degrees C. The xylanase was purified by ammonium sulfate precipitation and gel filtration. The molecular weight of the xylanase was estimated to be 20,400 by SDS-PAGE. Optimal temperature and pH for the xylanase activity was 60 degrees C and 6.5, respectively. The enzyme was stable at temperatures upto 40 degrees C and pH values from 4 to 10. The xylanase was completely inhibited by the addition of 2 mM mercury ion. Apparent K-m and V-max values for oat spelt xylan were 9.2 mg/ml and 1954 U/mg protein, respectively. For birchwood xylan, the values were 6.3 mg/ml and 1009 U/mg protein, The predominant products of the xylan hydrolysis were xylobiose, xylotriose and xylotetraose, indicating that the enzyme is an endoxylanase. Upto 85% of the initially added enzyme (2 U/ml) was bound to 50 mg/ml of the insoluble fraction of oat spelt xylan after incubation at 30 degrees C for 30 min.