Reporter gene technology has facilitated greatly the analysis of gene expression and the study of individual promoters and their regulation. Although various reporter gene systems are available, none of them are universally applicable and consequently, studies aimed at screening of new reporters are continuing. Toward this end, an acid phosphatase, designated SapS, was identified and characterized from the culture supernatant of a Staphylococcus aureus strain isolated from vegetables. Biochemical characterization of the 30-kDa monomeric enzyme indicated that it displayed optimum activity at 40°C and pH 5, using p-nitrophenyl phosphate (pNPP) as substrate. The enzymatic activity was enhanced by Mg2+, but was inhibited by EDTA and molybdate. Based on its properties and amino acid sequence analyses, SapS was classified as a new member of the bacterial class C family of non-specific acid phosphatases. The S. aureus SapS enzyme was subsequently evaluated as a reporter for host strain evaluation and cell surface display. Bacillus halodurans of which the major cell wall protease gene (wprA) was inactivated was used as expression host, and the cell wall-binding domain of the cwlC gene from B. halodurans was used as an anchoring motif for cell surface display. The results from in vitro enzyme activity assays indicated that extracellular production of the SapS reporter enzyme was improved 3.5-fold in the mutant compared to wild-type B. halodurans strain. Zymographic detection of SapS activity showed that the SapS-CwlC fusion protein was localized in the B. halodurans cell wall fraction, thus demonstrating the potential of SapS as a reporter for cell surface display of heterologous proteins. The versatility of the SapS enzyme as a reporter for gene expression and protein secretion in both Gram-positive and Gram-negative bacteria was also investigated. Transcriptional and translational fusions of the sapS gene with selected heterologous promoters and signal sequences were constructed, and expressed in Escherichia coli, B. subtilis and B. halodurans. The strongest promoter for heterologous protein production in each of the host strains was identified, i.e. the E. coli lacZ promoter in E. coli, the B. halodurans alkaline protease promoter in B. subtilis, and the B. halodurans σD promoter in B. halodurans.