By marker exchange mutagenesis, Bacillus megaterium strain UN-1 (Bm-UN1) was used to prepare a mutant strain B. megaterium UN-cat (Bm-UNcat) lacking the penicillin G acylase gene (pac). The pac gene from Bm-UNI was subcloned into pTF6 and the resultant plasmid, pBA402, was introduced into Bm-UNcat and Bacillus subtilis. Bm-UNcat harbouring pBA402 produced high penicillin G acylase (PAC) activity of 13.7, 19.5 and 20.4 U ml(-1) at 24, 36 and 48 h of culture, respectively. This was two- to fivefold higher than PAC produced by B. subtilis harbouring pBA402 and about 20-fold higher than PAC produced by the parent strain, Bm-UN1.