An operon, bglABC, that encodes two sugar permeases and a β-glucosidase was cloned from a cellulolytic actinomycete, Thermobifida fusca, into Escherichia coli and sequenced. The bglC gene encoding an intracellular β-glucosidase (β-d-glucoside glucohydrolase, EC 3.2.1.21) belonging to glycosyl hydrolase family 1 was subcloned and expressed in E. coli. The purified enzyme (MW 53,407 Da; pI 4.69) hydrolyzed substrates containing both β 1 → 4 and β 1 → 2 glycosidic bonds, and was most active against cellobiose (Vmax= 29, Km= 0.34 mm), cellotriose, cellotetraose, and sophorose. The enzyme also showed aryl-β-glucosidase activity on p-nitrophenyl-β-d-glucopyranoside and p-nitrophenyl-β-d-cellobioside. BglC had a pH optimum of 7.0 and a temperature optimum of 50°C. The enzyme was stable at 60°C, but was rapidly inactivated at 65°C. BglC was inhibited by low concentrations of gluconolactone, but was insensitive to end-product inhibition by glucose and was not affected by Ca or Mg ions or EDTA. Its properties are well suited for use in a process to hydrolyze biomass cellulose to glucose.