Keratins are water insoluble proteins of our environment. Being extremely resistant to degradation by proteolytic enzymes, keratins are digested mainly by alkali and keratinase enzymes. The aim of present study was to characterize the indigenous keratinase for potentials of keratin-degrading activities. We report the purification and characterization of keratinase from Bacillus subtilis isolated from soil of District Khairpur. The keratinase possessed good stability with >90% activity for one month and 50% activity after two months at 4oC. The enzyme was active for 48 h at room temperature. The temperature range for production and activity was between 37-50 o C with optimum at 37o C from purified enzyme. Enzymatic activity was observed over a wide range of pH (8.0-11.0) however, optimum pH was found to be 10.0 indicating alkaliphic nature of this keratinase. The molecular mass of the keratinase was 30 kDa. The keratinase activity was not inactivated in presence of PMSF and EDTA but affected by HgCl2. This property of the enzyme indicated that it was a cysteine protease. Gelatin appeared as preferred substrate followed by keratin. Psoriasis scale hydrolysis and dehairing activities showed by this enzyme qualify it as a novel keratinase. Alkaliphilic, thermotolerant keratinase (a cysteine protease) from an indigenous strain of Bacillus subtilis exhibited substantial keratinolytic activities such as dehairng of goat skin and psoriases scale hydrolysis and appeared as a novel keratinase.