Cycloinulooligosaccharide fructanotransferase (CFTase) converts inulin into cyclooligosaccharides of -(21)-linked D-fructofuranose by catalyzing an intramolecular transfructosylation reaction. The CFTase gene was cloned and characterized from Bacillus macerans CFC1. The CFTase gene encoded a polypeptide of 1,333 amino acids with a calculated M_r of 149,563. Western blot and zymography analyses revealed that the CFTase with a molecular mass of 150 kDa (CFT150) was processed (between Ser389 and Phe390 residue) to form a 107-kDa protein (CFT107) in the B. macerans CFC1 cells. The processed CFT107 was similar in its mass to the previously purified CFTase from B. macerans CFC1. The CFT107 enzyme was produced by B. macerans CFC1 but was not detected from the recombinant Escherichia coli cells, indicating that the processing event occurred in a host-specific manner. The two CFTases (CFT150 and CFT107) exhibited the same enzymatic properties, such as influences of pH and temperature on the enzyme activity, the intermolecular transfructosylation ability, and the ability of hydrolysis of cycloinulooligosaccharides produced by the cyclization reaction. However, the thermal stability of CFT107 was slightly higher than that of CFT150. The most striking difference between the two enzymes was observed in their K_m values; the value for CFT150 (1.56 mM) was threefold lower than that for CFT107 (4.76 mM). Thus, the specificity constant (k_cat/K_m) of CFT150 was about fourfold higher than that of CFT107. These results indicated that the N-terminal 358-residue region of CFT150 played a role in increasing the enzyme's binding affinity to the inulin substrate.