Dipeptidase (dipeptide hydrolase [EC 3.4.13.11]) has been purified to homogeneity and crystallized from the cell extract of Bacillus stearothermophilus IFO 12983. The enzyme has a molecular weight of about 86,000, and is composed of two subunits identical in molecular weight (43,000). The enzyme contains 2 g atoms of zinc per mol of protein. A variety of dipeptides consisting of glycine or only L-amino acids serve as substrates of the enzyme; Km and Vmax values for L-valyl-L-alanine are 0.5 mM and 68.0 units/mg protein, respectively. The enzyme is significantly stable not only at high temperatures but also on treatment with protein denaturants such as urea and guanidine hydrochloride. The enzyme also catalyzes hydrolysis of several N-acylamino acids with Vmax values 3-30% of those for the hydrolysis of dipeptides. The thermostable dipeptidase shares various properties with bacterial aminoacylase [EC 3.5.1.14]: their subunit molecular weight, metal content and requirement, amino acid composition, and amino acid sequence in the N-terminal region are very similar.