An extracellular $eta$-glucosidase produced by Monascus purpureus NRRL1992 in submerged cultivation was purified by acetone precipitation, gel filtration, and hydrophobic interaction chromatography, resulting in a purification factor of 92-fold. A $2^2$ central-composite design (CCD) was performed to find the best temperature and pH conditions for enzyme activity. Maximum activity was observed in a wide range of temperature and pH values, with optimal conditions set at $50^{circ}C$ and pH 5.5. The $eta$-glucosidase showed moderate thermostability, was inhibited by $HgCl_2$, $K_2Cr_O_4$, and $K_2Cr_2O_7$, whereas other reagents including $eta$-mercaptoethanol, SDS, and EDTA showed no effect. Activity was slightly stimulated by low concentrations of ethanol and methanol. Hydrolysis of p-nitrophenyl-$eta$-D-glucopyranoside (pNPG), cellobiose, salicin, n-octyl-$eta$-D-glucopyranoside, and maltose indicates that the $eta$-glucosidase has broad substrate specificity. Apparently, glucosyl residues were removed from the nonreducing end of p-nitrophenyl-$eta$-D-cellobiose. $eta$-Glucosidase affinity and hydrolytic efficiency were higher for pNPG, followed by maltose and cellobiose. Glucose and cellobiose competitively inhibited pNPG hydrolysis.