Screening of the micro-organisms from an in-house microbial culture repository, identified a bacterial strain bearing membrane-bound, inducible ester hydrolase activity. The strain designated as RRL-BB1 has been identified as Bacillus subtilis by 16 S rRNA typing. Its application in the kinetic resolution of several racemates, including drug intermediates, showed moderate to high enantioselectivity. The enzyme, designated as BBL, exhibited high enantioselectivity (ee ≈99%) with acyl derivatives of unsubstituted and substituted 1-(phenyl)ethanols and 1-(6-methoxy-2-naphthyl)ethanols. With acyl derivatives of 2-(6-methoxy-2-naphthyl)propan-1-ol, moderate enantioselectivity was observed. The enzyme also showed moderate enantioselectivity with alkyl esters of carboxylic acids i.e. 2-bromopropanoic acid and 2-hydroxy-4-phenylbutanoic acid. The enzyme was purified to >90% purity from cell-free extract of RRL-BB1 with 26% overall yield. The purified enzyme exhibited hydrolase activity without any noticeable decrease in the rate of hydrolysis or the enantioselectivity profile. A specific activity of 450 units/mg protein resulted after at least a 200-fold purification of the crude cell-free extract. The key purification step was the irreversible adsorption of the salt-precipitated crude enzyme on hydrophobic resin, in the presence of a low salt concentration, and desorption of the enzyme with a linear gradient of 1% sodium cholate. The purified enzyme was a 45 kD monomer as shown by SDS/PAGE. The N-terminal amino acid sequence of the purified enzyme was determined as Thr-Lys-Leu-Thr-Val-Gln-Thr-Arg-Asp-Gly-Ala-Leu-Arg-Gly-Thr. The N-terminal sequence did not bear any homology with other known bacterial lipases. BBL is maximally active at 37 °C, pH 8.0 and fairly stable up to 40 °C, pH 6–10. The enzyme is insensitive to EDTA but inhibited by serine protease inhibitor PMSF. Its activity (72%) was retained in the presence of the anionic detergent SDS at a concentration of 0.2% (w/v).