1-Deoxynojirimycin, a pseudo-monosaccharide, is a strong inhibitor of glucoamylase but a relatively weak inhibitor of cyclodextrin glucanotransferase (CGTase). To elucidate this difference, the crystal structure of the CGTase from alkalophilic Bacillus sp. 1011 complexed with 1-deoxynojirimycin was determined at 2.0 A resolution with the crystallographic R value of 0.154 (R(free) = 0.214). The asymmetric unit of the crystal contains two CGTase molecules and each molecule binds two 1-deoxynojirimycins. One 1-deoxynojirimycin molecule is bound to the active center by hydrogen bonds with catalytic residues and water molecules, but its binding mode differs from that expected in the substrate binding. Another 1-deoxynojirimycin found at the maltose-binding site 1 is bound to Asn-667 with a hydrogen bond and by stacking interaction with the indole moiety of Trp-662 of molecule 1 or Trp-616 of molecule 2. Comparison of this structure with that of the acarbose-CGTase complex suggested that the lack of stacking interaction with the aromatic side chain of Tyr-100 is responsible for the weak inhibition by 1-deoxynojirimycin of the enzymatic action of CGTase.