The first report of slow-tight inhibition of xylanase by a bifunctional inhibitor alkalo-thermophilic Bacillus inhibitor (ATBI), from an extremophilic Bacillus sp. is described. ATBI inhibits aspartic protease (Dash, C., and Rao, M. (2001) J. Biol. Chem., 276, 2487-2493) and xylanase (Xyl I) from a Thermomonospora sp. The steady-state kinetics revealed time-dependent competitive inhibition of Xyl I by ATBI, consistent with two-step inhibition mechanism. The inhibition followed a rapid equilibrium step to form a reversible enzyme-inhibitor complex (EI), which isomerizes to the second enzyme-inhibitor complex (EI*), which dissociated at a very slow rate. The rate constants determined for the isomerization of EI to EI*, and the dissociation of EI* were 13 +/- 1 x 10(-6) s(-1) and 5 +/- 0.5 x 10(-8) s(-1), respectively. The K(i) value for the formation of EI complex was 2.5 +/- 0.5 microm, whereas the overall inhibition constant K(i)* was 7 +/- 1 nm. The conformational changes induced in Xyl I by ATBI were monitored by fluorescence spectroscopy and the rate constants derived were in agreement with the kinetic data. Thus, the conformational alterations were correlated to the isomerization of EI to EI*. ATBI binds to the active site of the enzyme and disturbs the native interaction between the histidine and lysine, as demonstrated by the abolished isoindole fluorescence of o-phthalaldehyde (OPTA)-labeled Xyl I. Our results revealed that the inactivation of Xyl I is due to the disruption of the hydrogen-bonding network between the essential histidine and other residues involved in catalysis and a model depicting the probable interaction between ATBI or OPTA with Xyl I has been proposed.