An extracellular β-glucosidase was purified 154-fold to electrophoretic homogeneity from the brown-rot basidiomycete Fomitopsis palustris grown on 2.0% microcrystalline cellulose. SDS-polyacrylamide gel electrophoresis gel gave a single protein band and the molecular mass of purified enzyme was estimated to be approximately 138 kDa. The amino acid sequences of the proteolytic fragments determined by nano-LC- MS/MS suggested that the protein has high homology with fungal β-glucosidases that belong to glycosyl hydrolase family 3. The Kms for p-nitorophenyl-β-D-glucoside (p-NPG) and cellobiose hydrolyses were 0.117 and 4.81 mM, and the Kcat values were 721 and 101.8 per sec, respectively. The enzyme was competitively inhibited by both glucose (Ki= 0.35 mM) and gluconolactone (Ki= 0.008 mM), when p-NPG was used as substrate. The optimal activity of the purified β-glucosidase was observed at pH 4.5 and 70°C. The F. palustris protein exhibited half-lives of 97 h at 55°C and 15 h at 65°C, indicating some degree of thermostability. The enzyme has high activity against p-NPG and cellobiose but has very little or no activity against p-nitrophenyl-β-lactoside, p-nitrophenyl-β-xyloside, p-nitrophenyl-α-arabinofuranoside, xylan, and carboxymethyl cellulose. Thus, our results revealed that the β-glucosidase from F. palustris can be classified as an aryl-β-glucosidase with cellobiase activity.