A neutral serine protease (designated Aoz1) was purified to homogeneity from a strain of Arthrobotrys oligospora, obtained from soil in Yunnan Province. The purified protein showed a molecular mass of approximately 38 000 Dalton, pI 4.9 and displayed optimal activity at 45 C and pH 6-8. The protein could hydrolyze gelatin, casein and the chromogenic substrate azocoll, and it could immobilize nematodes in vitro (Panagrellus redivivus L. [Goodey]). The level of activity in culture medium was found to increase with increasing gelatin concentration. Scanning electron micrographs demonstrated dramatic structural changes in nematode cuticle treated with the purified protease. A partial peptide sequence obtained by N-terminal sequence analysis was used to design degenerate primers for the isolation of a cDNA gene encoding the mature protease. Analysis of the cDNA and corresponding genomic sequence revealed 97% identity with PII, a gene previously described from A. oligospora, and we conclude that this gene is likely a PII ortholog.