This study reports the purification and characterization of beta-glucosidase from a newly isolated thermophilic fungus, Melanocarpus sp. Microbial Type Culture Collection (MTCC) 3922. The molecular weight of beta-glucosidase was determined to be similar to 92 and 102 kDa with SDS PAGE and gel filtration, respectively, and pI of similar to 4.1. It was optimally active at 60 degrees C and pH 6.0, though was stable at 50 degrees C and pH 5.0 - 6.0. The presence of DTT, mercaptoethanol and metal ions such as Na+, K+, Ca2+, Mg2+ and Zn2+ positively influenced the activity of beta-glucosidase but the activity was inhibited in the presence of CuSO4. beta-Glucosidase recognized pNP- beta-glucopyranoside (pNPG) as the preferred substrate, and showed very low affinity for pNP- beta-D-cellobioside. Km and V-max for the hydrolysis of pNPG by beta-glucosidase was calculated as 3.3 mM and 43.68 mu molmin(-1)mg protein(-1), respectively and k(cat) was quantified as 4 x 10(3) min(-1). beta-Glucosidase activity was enhanced appreciably in the presence of alcohols ( methanol and ethanol) moreover, purified beta-glucosidase showed putative transglycosylation activity that was positively catalyzed in presence of methanol as an acceptor molecule.