A gene encoding thermostable β-glycosidase from genomic library of Thermus flavus AT-62 (ATCC 33923) was cloned, sequenced, and expressed in Escherichia coli. The gene, designated as tat β-gly, consists 1296 bp of nucleotides and encoded a polypeptide of 431 amino acids. Tat β-gly showed a strong amino acid sequence similarity to those of β-glycosidases from other Thermus species belonging to the glycosyl hydrolase family 1. The enzyme was overexpressed in E. coli BL21(DE3) with pET21b(+) vector system and purified to homogeneity by heat precipitation and Ni 2+-affinity chromatography. The recombinant enzyme was monomeric with a molecular mass of 49 kDa. The temperature and pH range for optimal activity of the purified enzyme were 80–90 °C and 5.0–6.0, respectively. At 70 °C, the enzyme was highly thermostable that could maintain 94% of its activity over 12 h. Tat β-glycosidase showed higher affinity for β- d-glucoside than for β- d-galactoside regarding as its K m or K cat/ K m ratio, however V max and K cat for β- d-galactoside were much higher than those for β- d-glucoside. The enzyme activity displayed a constant increasing behavior for lactose hydrolysis without substrate inhibition until 250 mM lactose was added at 70 °C and pH 7.0. This study suggests that the newly cloned enzyme has a strong potential to utilize in lactose milk production during milk pasteurization.