Acinetobacter strain PS12B was isolated from marine sediment and was found to be a good candidate to degrade agar and produce agarase enzyme. The extracellular agarase enzyme from strain PS12B was purified by ammonium sulfate precipitation followed by DEAE-cellulose ion-exchange chromatography. The specific activity of the crude enzyme which was 1.52 U increased to 45.76 U, after two-stage purification, with an enzyme yield of 9.76%. Purified enzyme had a molecular mass of 24 kDa. The optimum pH and temperature for activity of purified agarase were found to be 8.0 and 40 A degrees C, respectively. The K (m) and V (max) values for agarase were 4.69 mg/ml and 0.5 mu mol/min, respectively. Treatment with EDTA reduced the agarase activity by 58% at 5 mM concentration. The enzyme activity was stimulated by the presence of Fe2+, Mn2+, and Ca2(+) ions while reducing reagents (beta-mercaptoethanol and dithiothreitol, DTT) enhanced its activity by 30-40%. The purified agarase exhibited tolerance to both detergents and organic solvents. Major hydrolysis products of agar were DP4 and also a mixture of longer oligosaccharides DP6 and DP7. The enzyme hydrolysed seaweed (Gracilaria verrucosa) exhibited strong antioxidant activity in vitro. Successful hydrolysis of seaweed indicates the potential use of the enzyme to produce seaweed hydrolysate having health benefits as well as the industrial application like the production of biofuels.