This research was undertaken to restore the biological activity of cyclodextrin glucanotransferase (CGTase) of Bacillus macerans origin expressed as inclusion bodies in recombinant Escherichia coli. The optimum concentration of urea used as a denaturant was 8 M. The supplementation of 0.5 M urea into a dialysis buffer increased the refolding efficiency by preventing any protein aggregation. The influence of the protein concentration, temperature, and pH were also investigated. The protein concentration was found to be the most important factor in the refolding efficiency. The optimum temperature was 15-$25^{circ}C$ and the optimum pH was 6.0. The maximum specific activity of the CGTase refolded under the optimum conditions was 92.2 U/mg, corresponding to 72% of the native CGTase. A comparison of the secondary structure between the native and the refolded CGTase showed that the relative ratio of the $alpha$-helix content in the native to the refolded CGTase was 1:0.82.