All thermotolerant methanol-utilizing Bacillus spp. investigated by us possess a NAD-dependent methanol dehydrogenase (MDH) activity which is stimulated by a protein present in the soluble fraction of Bacillus sp. C1 cells. This activator protein was purified to homogeneity from Bacillus sp. C1 cells grown at a low dilution rate in a methanol-limited chemostat culture. The native activator protein (Mr = 50,000) is a dimer of Mr = 27,000 subunits. The N-terminal amino acid sequence revealed no significant similarity with any published sequences. Stimulation of MDH activity by the activator protein required the presence of Mg2+ ions. Plots of specific MDH activity versus activator protein concentration revealed Michaelis-Menten type kinetics. In the presence of activator protein, MDH displayed biphasic kinetics (v versus substrate concentration) toward C1-C4 primary alcohols and NAD. The data suggest that in the presence of activator protein plus Mg2+ ions, MDH possesses a high affinity active site for alcohols and NAD, in addition to an activator- and Mg2(+)-independent low affinity active site. The activation mechanism remains to be elucidated.