A genomic DNA fragment encoding a putative maltooligosyltrehalose synthase (NfMTS) for trehalose biosynthesis was cloned by the degenerate primer-PCR from cyanobacterium Nostoc flagelliforme. The ORF of NfMTS was 2,799 bp in length and encoded 933 amino acid residues constituting a 106.6 kDa protein. The deduced amino acid sequence of NfMTS contained 4 regions highly conserved for MTSs. By expression of NfMTS in E. coli, it was demonstrated that the recombinant protein catalyzed the conversion of maltohexaose to maltooligosyl trehalose. The $K_m$ of the recombinant enzyme for maltohexaose was 1.87 mM and the optimal temperature and pH of the recombinant enzyme was at $50^{circ}C$ and 7.0, respectively. The expression of MTS of N. flagelliforme was upregulated, and both trehalose and sucrose contents increased significantly in N. flagelliforme during drought stress. However, trehalose accumulated in small quantities (about 0.36 mg/g DW), whereas sucrose accumulated in high quantities (about 0.90 mg/g DW), indicating both trehalose and sucrose were involved in dehydration stress response in N. flagelliforme and sucrose might act as a chemical chaperone rather than trehalose did during dehydration stress.