A chitosanase-producing bacterium was isolated from Taiwan soils and identified as Bacillus cereus D-11 based on the biochemical properties and 16S rRNA gene sequence. The optimal medium for enzyme production consisted of 0.7% colloidal chitosan, 1% yeast extract, and 1% NaCl at an initial pH of 7.0 with 0.5% inoculation concentration (1.4×10 8 CFU/ml). After cultivation at 30°C for 3 days, the maximal activity of 4.85U/ml was observed. An extracellular chitosanase produced from B. cereus D-11 was concentrated by lyophilization and purified by Sephadex G-150 gel filtration and CM-Sephadex ion exchange column chromatography. The molecular weight of the purified chitosanase was estimated to be 41kDa by 12.5% SDS–PAGE. The optimal pH and temperature for the chitosanase were 6.0 and 60°C, respectively. The enzyme was stable below 50°C and from pH 5 to 10. N-terminal amino acid sequence exhibited highest homology to the chitosanases belonging to glycoside hydrolase family 8. The enzyme was inhibited by 10mM 2-hydroxy-5-nitrobenzyl bromide but activated by phenylglyoxal and chloramine T. The K m and V max values were 7.5mg/ml and 2.15×10 −7 mol/mg/s for soluble chitosan (degree of deacetylation, DD 86%) as substrate. The D-11 chitosanase degraded chitosan with DD ranging from 70% to 100%, but did not degrade chitin. The most susceptible substrate was 86% deacetylated chitosan. Furthermore, the D-11 chitosanase inhibited the mycelial growth of Rhizoctonia solani on PDA medium.