An extracellular chitinase from culture filtrates of Streptomyces lydicus WYEC108, a broad spectrum antifungal biocontrol agent, was characterized and purified. Its role in the antifungal activity of this actinomycete was studied. Low constitutive levels of the enzyme were observed when cultures were grown with both simple and complex carbon substrates. The optimal temperature and substrate concentration for maximal chitinase production were 25-30 degrees C and 0.4-0.8 g ml(-1) chitin, respectively. High chitinase production was obtained when 1% colloidal chitin was present in the medium as a growth substrate. Activity was induced by N-acetylglucosamine or N,N’-diacetylchitobiose (GlcNac)(2) and repressed by glucose, xylose, arabinose, raffinose, and carboxymethyl cellulose. Strong catabolite repression of the chitinase was observed. Addition of pectin, laminarin, starch, or beta-glucan to the chitin-containing medium, however, increased chitinase production. Probing the S. lydicus genomic DNA with the chiA gene from S. lividans has localized the gene to a 2.5 kb DNA fragment of genomic DNA. The chitinase appears to play a role in the antifungal activities of S. lydicus WYEC108. Production was greatly enhanced when cells were grown in a medium containing colloidal chitin supplemented with certain fungal cell wall preparations, in particular those from Pythium or Aphanomyces species. Crude fungal cell walls were lysed by partially purified chitinase. While S. lydicus also produces one or more antifungal antibiotics, its chitinase probably plays a significant role in the in vivo antifungal biocontrol activity of this rhizosphere-colonizing actinomycete.