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Mutanase, α-(1→3)-glucanase, belonging to the family glucanohydrolase, catalyses mutan [α-(1→3)-glucan] synthesized by cariogenic streptococci and hence has potential in caries prophylaxis. A novel bacterial strain with potential to produce higher mutanase (glucanohydrolase) activity was isolated from soils contaminated with cellulosic waste. One of the isolated strains, RSP-02, was subjected to biochemical and 16S rRNA molecular analysis, and we noticed that it belongs to the genus Paracoccus. The mutanase production (800- 1200 U l-1) in this strain was growth associated and substrate induced, and the activity was comparable with the strains reported earlier. The enzyme displayed a molecular mass of 138 kDa by native PAGE studies, showed endolytic activity and produced nigerose as end product. In vitro studies revealed production of 140±2.82 μg of glucose equivalents in 30 min from the biofilm formed on glass surface indicating its potentiality in dentistry. To the best of our knowledge, this is the first report on the production of mutanase by Paracoccus sp.; hence, this isolated bacterial strain is designated as Paracoccus mutanolyticus RSP-02.