Thermoanaerobacterium aotearoense P8G3#4 produced β-glucosidase (BGL) intracellularly when grown in liquid culture on cellobiose. The gene bgl, encoding β-glucosidase, was cloned and sequenced. Analysis revealed that the bgl contained an open reading frame of 1314 bp encoding a protein of 446 amino acid residues, and the product belonged to the glycoside hydrolase family 1 with the canonical glycoside hydrolase family 1 (GH1) (β/α)8 TIM barrel fold. Expression of pET-bgl together with a chaperone gene cloned in vector pGro7 in Escherichia coli dramatically enhanced the crude enzyme activity to a specific activity of 256.3 U/mg wet cells, which resulted in a 9.2-fold increase of that obtained from the expression without any chaperones. The purified BGL exhibited relatively high thermostability and pH stability with its highest activity at 60 °C and pH 6.0. In addition, the activities of BGL were remarkably stimulated by the addition of 5 mM Na+ or K+. The enzyme showed strong ability to hydrolyze cellobiose with a Km and Vmax of 25.45 mM and 740.5 U/mg, respectively. The BGL was activated by glucose at concentration varying from 50 to 250 mM and tolerant to glucose inhibition with a Ki of 800 mM glucose. The supplement of the purified BGL to the sugarcane bagasse hydrolysis mixture containing a commercial cellulase resulted in about 20 % enhancement of the released reducing sugars. These properties of the purified BGL should have important practical implication in its potential applications for better industrial production of glucose or bioethanol started from lignocellulosic biomass.