Bacteria species involved in degradation of cellulosic substrates produce a variety of enzymes for processing related compounds along the hydrolytic pathway. Paenibacillus polymyxa encodes two homologous beta-glucosidases, BgIA and BgIB, presenting different quaternary structures and substrate specificities. We previously reported the 3D-structure of BgIA, which is highly specific against cellobiose. Here, we present structural analysis of BgIB, a monomeric enzyme that acts as an exo-beta-glucosidase hydrolyzing cellobiose and cellodextrins of higher degree of polymerization. The crystal structure of BgIB shows that several polar residues narrow the active site pocket and contour additional subsites. The structure of the BgIB, cellotetraose complex confirms these subsites, revealing the substrate-binding mode, and shows the oligosaccharide-enzyme recognition pattern in detail. Comparison between BgIA and BgIB crystal structures suggests that oligomerization in BgIA can assist in fine-tuning the specificity of the active centre by modulating the loops surrounding the cavity. We have solved the crystal structure of BgIB with bound thiocellobiose, a competitive inhibitor, which together with the BgIB-cellotetraose complex delineate the general features of the aglycon site. The detailed characterization of the atomic interactions at the aglycon site show a recognition pattern common to all bacterial beta-glucosiclases, and presents some differences with the aglycon site in plant beta-glycosiclases essentially by means of a different orientation of the basal Trp. The crystal structures of of BgIB with a covalently bound inhibitor (derived from 2-fluoroglucoside) and glucose (produced by hydrolysis of the substrate in the crystal), provide additional pictures of the binding events and the intermediates formed during the reaction. Altogether, this information can assist in the understanding of subtle differences of the enzyme mechanism and substrate recognition within this family of enzymes, and consequently it can help in the development of new enzymes with improved activity or specificity. (c) 2007 Elsevier Ltd. All rights reserved.