A $eta$-Galactosidase producing strain, Alkalophilic Bacillus sp, YS-309, has been isolated from soil sample. The strain was capable of producing large amount of intracellular $eta$-galactosidase in the alkaline media rather than in the neutral media. The preferable medium composition has been determined to be as follows: 0.5% lactose, 0.5% yeast extract, 0.5% soybean meal, 0.1% KH$_2$PO$_4$, 0.02% MgSO$_4$7$H_2O$ 0,0.6% Na$_2$CO$_3$ (pH 9.9). The enzyme was produced by lactose or IPTG as in-ducer. But both Enzyme synthesis and cellular growth were decreased when lactose was added at the higher concentrations than 1.5% (v/v).