Isomaltulose is a structural isomer of sucrose. Thanks to healthy effects against dental diseases and suitability for diabetic patients, children, physically active peoples, isomaltulose is considered as a promising sucrose replacement. Commercially, isomaltulose is produced by enzymatic conversion of sucrose using immobilized cells of Protaminobacter rubrum (=Serratia plymuthica) strain CBS574.77 as the biocatalyst. During a screening program for isomaltulose producers, a Gram negative bacterial strain ISB-6 was isolated from a rotten peach. A partial 16S rDNA sequence of 1444 nucleotides from the strain was obtained and has been deposited at the GenBank with accession number JQ305691. JQ305691 was identical to the 16S rDNA sequence of Klebsiella variicola At-22 and thus, ISB-6 was placed under Klebsiella variicola. Conversion of sucrose by K. variicola ISB-6 was greatly influenced by pH of medium. At low pH (3.0 to 5.0), instead of converting sucrose into isomaltulose, K. variicola ISB-6 hydrolyzed most of sucrose into glucose and fructose. At pH above 5.0, the hydrolysis of sucrose (invertase activity) was inhibited. The conyersion of sucrose to isomaltulose was most efficient at pH 6.5 and reduced rapidly at pH 7.0 to pH 9.0. Temperature of 40°C was optimum for the conversion of sucrose to isomaltulose by K. variicola ISB-6. The enzymatic activity was inactivated at the temperature above 55°C. Under optimized condition, complete conversion of 30 percent sucrose solution to isomaltulose was achieved after 6 hours of incubation. The conversion product contained isomaltulose and minute amount of trehalulose, neither sucrose, glucose nor fructose were detected. This was the first report on isomaltulose production by K. variicola and demonstrated the application potential of K. variicola strain ISB-6.