An obligatory alkalophilic Bacillus sp. P-2, which produced a thermostable alkaline protease was isolated by selective screening from water samples. Protease production at 30 °C in static conditions was highest (66 U/ml) when glucose (1% w/v) was used with combination of yeast extract and peptone (0.25% w/v, each), in the basal medium. Protease production by Bacillus sp. P-2 was suppressed up to 90% when inorganic nitrogen sources were supplemented in the production medium. Among the various agro-byproducts used in different growth systems (solid state, submerged fermentation and biphasic system), wheat bran was found to be the best in terms of maximum enhancement of protease yield as compared to rice bran and sunflower seed cake. The protease was optimally active at pH 9.6, retaining more than 80% of its activity in the pH range of 7–10. The optimum temperature for maximum protease activity was 90 °C. The enzyme was stable at 90 °C for more than 1h and retained 95 and 37% of its activity at 99 °C and 121 °C, respectively, after 1 h. The half-life of protease at 121 °C was 47 min.