This invention relates to a .gamma.-cyclodextrin glucanotransferase having novel properties, to a process for the production of the .gamma.-cyclodextrin glucanotransferase which comprises culturing a strain belonging to the genus Brevibacterium capable of producing cyclodextrin glucanotransferase, thereby allowing the strain to produce the .gamma.-cyclodextrin glucanotransferase in a culture medium, and subsequently collecting the enzyme, to a process for the production of cyclodextrin which comprises allowing the cyclodextrin glucanotransferase to react with substrate dissolved in a solution, thereby effecting formation of .gamma.-cyclodextrin as a main product, and to a method for increasing .gamma.-cyclodextrin yield without accompanying yield increase of total cyclodextrin, which comprises adding ethyl alcohol to a reaction solution in which .gamma.-cyclodextrin and .beta.-cyclodextrin are formed from starch by the action of .gamma.-cyclodextrin glucanotransferase, thereby effecting repressed formation of .beta.-cyclodextrin and enhanced formation of .gamma.-cyclodextrin. Development of the process of this invention has rendered possible low cost production of .gamma.-cyclodextrin and therefore expands practical use of .gamma.-cyclodextrin to the field of food and the like.