An endospore-forming bacterium, strain B16, was isolated from a soil sample and identified as a Bacillus sp. The strain presented remarkable nematotoxic activity against nematode Panagrellus redivivus. The crude extracellular protein extract from culture supernatant of the bacteria killed about 80% of the tested nematodes within 24 h, suggesting the involvement of extracellular proteases. A homogeneous extracellular protease was purified by chromatography, and the hypothesis of proteinaceous pathogeny in the infection of B16 strain was confirmed by the experiments of killing living nematodes and by the degradation of purified nematode cuticle when treated with the homogenous protease. The gene for the virulence protease was cloned, and the nucleotide sequence was determined. The deduced amino acid sequence showed significant similarity with subtilisin BPN' but low homology with the other cuticle-degrading proteases previously reported in fungi. Characterization of the purified protease revealed the molecular mass of 28 kDa and the optimum activity at pH 10, 50 degrees C. The purified protease can hydrolyze several native proteinaceous substrates, including collagen and nematode cuticle. To our knowledge, this is the first report of a serine protease from a Bacillus genus of bacteria that serves as a pathogenic factor against nematodes, an important step in understanding the relationship between bacterial pathogen and host and in improving the nematocidal activity in biological control.