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To investigate properties of the proteolytic activity of a yeast cell wall lytic soil bacterium identified as an Arthrobacter species.The organism was grown at pH 7·5 and 30°C in shake flasks on media with different complex subtrates. Highest proteolytic activity assayed with azocaseine was detected in media with wheat gluten. In addition, L-leucine, L-alanine exopeptidase activity and esterase activity were found. The proteolytic activity showed stability up to pH 12, with a maximum at pH 11. The temperature optimum was at 55°C, but there was a loss in enzyme activity of 50% within 2 h. The proteolytic activity was inhibited by 3,4-dichloroisocumarin, whereas there was little or no effect with EDTA, pepstatin A or E64.The proteolytic activity is highly alkaline stable. The formation of the enzyme can be induced by media with high protein content.