The gene (chiD) encoding the precursor of chitinase D was found to be located immediately upstream of the chiA gene, encoding chitinase A1, which is a key enzyme in the chitinase system of Bacillus circulans WL-12. Sequencing analysis revealed that the deduced polypeptide encoded by the chiD gene was 488 amino acids long and the distance between the coding regions of the chiA and chiD genes was 103 bp. Remarkable similarity was observed between the N-terminal one-third of chitinase D and the C-terminal one-third of chitinase A1. The N-terminal 47-amino-acid segment (named ND) of chitinase D showed a 61.7% amino acid match with the C-terminal segment (CA) of chitinase A1. The following 95-amino-acid segment (R-D) of chitinase D showed 62.8 and 60.6% amino acid matches, respectively, to the previously reported type III-like repeating units R-1 and R-2 in chitinase A1, which were shown to be homologous to the fibronectin type III sequence. A 73-amino-acid segment (residues 247 to 319) located in the putative activity domain of chitinase D was found to show considerable sequence similarity not only to other bacterial chitinases and class III higher-plant chitinases but also to Streptomyces plicatus endo-beta-N-acetylglucosaminidase H and the Kluyveromyces lactis killer toxin alpha-subunit. The evolutionary and functional meanings of these similarities are discussed.