A thermophilic bacterium producing D-stereospecific dipeptidase was isolated from Korean soil samples. The enzyme hydrolyzed the peptide bond between D-alanyl-D-alanine (D-Ala-D-Ala). The isolated bacterial strain was rod shaped, gram-positive, motile, and formed an endospore. Morphological and physiological characteristics suggested this microorganism a thermophilic Bacillus species, and was named as Bacillus sp. BCS-l. The production of D-stereospecific dipeptidase was growth-associated and optimal at $55^{circ}C$. The enzyme was applied for the synthesis of D-amino acid-containing peptide, N-benzyloxycarbonyl-L-aspartyl-D-alanine benzyl ester (Z-L-Asp-D-AlaOBzl), as a model reaction. A thermodynamically controlled synthesis of Z-L-Asp-D-AlaOBzl was achieved in an organic solvent.