Abstract: The srfA gene (1976 bp) was cloned from Bacillus sp. SK320 into E. coli DH5α using plasmid vector pGEM-T (3 kb). Higher esterase activity was observed in the clone E. coli pSKA with olive oil as sole carbon source, as compared to that from Bacillus sp. SK320. Purification of esterase from E. coli (pSKA) on Q-Sepharose resolved the extracellular esterase into three components designated as A1, A2 and A3. All the three esterases were heterogeneous in nature. Sephadex G-75 further resolved the esterase into sub components which were purified to homogeneity as seen by activity as well as silver staining. Clone E. coli pSKA showed esterase enzyme with mol. wt. ranging from 12 to 53 Da indicating the multiplicity of the enzyme. An extracellular esterase from clone E. coli pSKA grown on olive oil was purified and shown to possess biosurfactant activity. Clone E. coli pSKA showed an enhancement in the biosurfactant production (2.45 g L-1) as compared to 1.2 g L-1 from Bacillus sp. SK320. Clone E. coli pSKA reduced the surface tension to 32 dynes cm-1 as compared to 40 dynes cm-1 by Bacillus sp. SK320.