Thermotolerant bacteria producing cyclodextrin glycosyltransferase (CGTase) were screened from soil, water and starch waste from starch factory including samples contaminated with carbohydrates collected from various areas in Thailand. About ninety- seven colonies exhibited clear zone on Medium I agar plates containing soluble starch when with 0.02% I[subscript 2] in 0.2% KI in primary screening. Among them, three isolates (BT01, BD01 and BO01) exhibited CGTase activity by forming yellow clear zone on red background using Horikoshi medium plate phenolphthalene dyes system. These isolates were checked for growth and enzyme activity by culturing in Horikoshi broth at the temperature range of 37-50 ํC for selection of the best thermotolerant strain. It was found that BT01 grew and produced CGTase well at 37-45 ํC. Strain BT01 exhibited highest CGTase compared with BD01 and BO01. Therefore, BT01 was chosen for further optimized condition. Biochemical and physiological characterization showed that BT01 was Bacillus circulans and was further identified by 16S rRNA analysis was Paenibacillus sp. with 98% homology. BT01 grew and produced CGTase at temperature range 37-45 ํC. The optimum pH and temperature of starter inoculum for cell growth were pH 9.0 and 37 oC in Medium I. The optimum culturing conditions for highest CD-forming activity were pH 10.0 and 40 oC for 72 hours in Horikoshi broth containing 0.5% soluble starch. The enzyme was partially purified by starch adsorption, the recovery and purification fold were 65.1% and 28.0, respectively. The molecular weight was estimated to be 79 kDa by SDS-PAGE. The optimum temperature for dextrinizing and CD-forming activity were 70 and 50-55 ํC. At 55 and 70 ํC, the optimum pH for dextrinizing activity were 6.0, while CD-forming activity were 7.0. Dextrinizing activity of enzyme stabilized at temperature up to 30 ํC and at pH range 6.0-9.0, while CD-forming activity retained its full activity up to 70 ํๆC and at pH range 6.0-8.0 for 1 hour. In presence of CaCl2 and substrate the enzyme activity could be slightly stabilized. The best condition for storing enzyme was -20 ํC in presence of 10 mM CaCl2. Cyclodextrin products from CGTase of BT01 was a:b = 1:1. pH and temperature of reaction mixture can influence the rate of CDs production and the optimum temperature of starch conversion into CDs was 55-60 ํC. The source of starch is not important for CGTase action and the ratio of alpha:beta-CD was remained constant.