A recombinant putative N-acyl-D-glucosamine 2-epimerase from Dictyoglomus turgidum was identified as a cellobiose 2-epimerase by evaluating its substrate specificity. The purified enzyme was a 46 kDa monomer with a specific activity of 16.8 mu mol min(-1) mg(-1) for cellobiose. The epimerization activity was maximal at pH 7.0 and 70 degrees C with a half-life of 55 h. The isomerization of the glucose at the reducing end of beta-1,4- and alpha-1,4-linked gluco-oligosaccharides to a fructose moiety by the enzyme took place after the epimerization of the glucose to a mannose moiety. The enzyme converted cellobiose to 12.8 % 4-O-beta-D-glucopyranosyl-D-mannose and 54.6 % 4-O-beta-D-glucopyranosyl-D-fructose as an equilibrium and converted lactose to 12.8 % epilactose and 54.3 % lactulose.