A biocontrol bacterium Bacillus licheniformis N1 grown in nutrient broth showed no chitinolytic activity, while its genome contains a gene which encodes a chitinase. The gene for chitinase from B. licheniformis N1 was amplified by PCR and the deduced amino acid sequence analysis revealed that the chitinase exhibited over 95% identity with chitinases from other B. licheniformis strains. Escherichia coli cells carrying the recombinant plasmid displayed chitinase activity as revealed by the formation of a clear zone on chitin containing media, indicating that the gene could be expressed in E. coli cells. Chitinase gene expression in B. licheniformis N1 was not detected by RT-PCR analysis. The protein was over-expressed in E. coli BL21 (DE3) as a glutathione Stransferase fusion protein. The protein could also be produced in B. subtilis 168 strain carrying the chitinase gene of N1 strain. The crude protein extract from E. coli BL21 carrying GST fusion protein or culture supernatant of B. subtilis carrying the chitinase gene exhibited enzyme activity by hydrolyzing chitin analogs, 4-methylumbelliferyl- β-D-N,N`-diacetylchitobioside and 4-methylumbelliferyl- β-D-N,N`,N``-triacetylchitotrioside. These results indicated that even though the chitinase gene is not expressed in the N1 strain, the coding region is functional and encodes an active chitinase enzyme. Furthermore, B. subtilis 168 transformants expressing the chitinase gene exhibited antifungal activity against Fulvia fulva by suppressing spore germination. Our results suggest that the proper engineering of the expression of the indigenous chitinase gene, which will lead to its expression in the biocontrol strain B. licheniformis N1, may further enhance its biocontrol activity.