Bacillus megaterium F-8 exhibited an intracellular acetamide hydrolyzing activity (AHA) when cultivated in modified nutrient broth with 3% tryptone, 1.5% yeast extract, and 0.5% sodium chloride, at pH 7.2, 45 °C for 24 h. Maximum AHA was recorded in the culture containing 0.1 M of sodium phosphate buffer, (pH 7.5) at 45 °C for 20 min with 0.2 % of acetonitrile and resting cells of B. megaterium F-8 equivalent to 0.2 ml culture broth. This activity was stable up to 55 °C and was completely inactivated at or above 60 °C. Maximum acyl transferase activity (ATA) was recorded in the reaction medium containing 0.1 M of potassium phosphate buffer, (pH 8.0) at 55 °C for 5 min with 0.85 mM of acetamide as acyl donor and hydroxylamine hydrochloride as acyl acceptor and resting cells of B. megaterium F-8 equivalent to 0.94 mg cells (dry weight basis). This activity was stable up to 60 °C and a rapid decline in enzyme activity was recorded above it. Under the optimized conditions, this organism hydrolyzed various nitriles and amides such as propionitrile, propionamide, caprolactam, acetamide, and acrylamide to corresponding acids. Acyl group transfer capability of this organism was used for the production of acetohydroxamic acid. ATA of B. megaterium F-8 showed broad substrate specificity such as for acetamide followed by propionamide, acrylamide, and lactamide. This amide hydrolyzing and amidotransferase activity of B. megaterium F-8 has potential applications in enzymatic synthesis of hydroxamic acids and bioremediation of nitriles and amides contaminated soil and water system.