A new enzyme, alternanase, which is effective for the endo-hydrolytic cleavage of alternan, producing a thinned composition of low molecular weight fractions which exhibit reduced viscosity and increased solubility relative to native alternan, is described. The enzyme is produced and secreted extracellularly by a plurality of novel bacteria isolated from soil. One of the fractions present in the thinned alternan resulting from hydrolysis with alternanase is a the cyclic tetrasaccharide, cyclo{-6)-.alpha.-D-Glcp-(1,3)-.alpha.-D-Glcp-(1,6)-.alpha.-D-Glcp-(1,3)-.alpha.-D-Glcp-(1-}. A novel method for isolating strains of microorganisms which produce endo-.alpha.-D-glucanases such as alternanase effective for the endo-hydrolytic cleavage or thinning of alternan is also described. Cultures of the subject strains are contacted with a test substrate of alternan coupled to a detectable indicator. Detection of released indicator provides an indication of endo-.alpha.-D-glucanase activity.