A thermostable cyclodextrin glucanotransferase (CGTase) was isolated from a Bacillus stearothermophilus strain, ET1, which was screened from Korean soil. The corresponding CGTase gene cloned in Escherichia coli shared 84% and 88% identity with CGTase genes from other B. stearothermophilus strains at the nucleotide and amino acid sequence level, respectively. The enzyme was purified to apparent homogeneity by beta-cyclodextrin (CD) affinity chromatography and high-performance liquid chromatography. The enzyme had an apparent molecular mass of 66,800 Da and a pI of 5.0. The optimum pH for the enzyme-catalyzed reaction was pH 6.0, and the optimum temperature was observed at 80 degrees C. Thermostability of the enzyme was enhanced by Ca2+, A 13% (w/v) cornstarch solution was liquefied and converted to CDs solely using this enzyme. The cornstarch conversion rate was 44% and alpha-, beta-, and gamma-CDs were produced in the ratio of 4.2:5.9:1.