Agarolytic bacteria were isolated from the coast of the Mediterranean Sea of New Damietta City Governorate, Egypt by enrichment culture technique on nutrient agar medium dissolved in seawater. Totally 32 morphological different bacterial colonies were isolated. All the isolates were screened for agarase activity on Basal salt solution medium B. Agarase activity was detected by using Lugol's iodine solution. Among the 32 isolates, 12 isolates showed agarase activity. The agarase activity was measured by the DNS method. Maximum agarolytic activity was recorded in the isolate D8. The identity of the agarolytic isolate (D8) was confirmed based on the microscopical, morphological, and biochemical tests. The bacterium was identified as Bacillus subtilis. The culture conditions were optimized for the maximal growth and production of extracellular agarases. The optimal incubation period, temperature, pH, and NaCl concentration recorded for maximum enzyme activity of Bacillus subtilis were 2 days, 40℃, 8, and 3 % concentration respectively. Agar (0.4%) was found to be the best carbon source among the tested carbohydrates. Bacillus subtilis grew well and produced a high level of agarase using yeast extract (0.3%) as a nitrogen source.