Three bacterial strains capable of producing extracellular proteases were isolated based on their ability to digest skimmed milk. One of these strains (designated as PD1) was identified as Bacillus cereus. Proteases secreted by PD1 were found to retain activity despite exposure to 65°C. Here, we have characterized the strain PD1 and its extracellular proteases and explored the possibility of recycling whey as a growth medium. Antibiotic sensitivity and carbohydrate utilization tests were performed. The kinetics of growth and protease secretion by PD1 were also established using LB broth or pH adjusted whey. It was found that protease activity in the culture supernatant was induced in the stationary phase of growth. Importantly, the stationary phase culture supernatants of PD1 in whey showed maximal protease activity at pH 8.0 and reaction temperature of 56-65°C. The data indicates that PD1 could prove to be a useful source of industrially relevant proteases. Furthermore, this study suggests a possible method of recycling whey to prevent pollution due to whey disposal.