After screening with 0.1% esculoside and 0.03% FeCl(3), we identified from rotten wood a fungal isolate HML0366 that produces high amount of β-glucosidase. Phenotypic and rDNA internal transcribed spacer sequence analyses indicated that the isolate belongs to Aspergillus oryzae. The β-glucosidase produced by HML0366 had an activity of 128 U/g. high performance liquid chromatography analysis also demonstrated a high transglycosylation activity of the crude enzyme. The β-glucosidase was stable between pH 4-10 at 60 °C. A gentiobiose yield of 30.86 g/L was achieved within 72 h of the enzymatic reaction at pH 5 and 55 °C using 50% glucose as the substrate. For the first time, we report here the isolation of an A. oryzae strain producing β-glucosidase with high hydrolytic activities. The crude enzyme has a high transglycosylation activity, which enables the enzymatic synthesis of gentiooligosaccharides.