Gluten free products have emerged during the last decades, as a result of a growing public concern and technological advancements allowing gluten reduction in food products. One approach is to use gluten degrading enzymes, typically at low or ambient temperatures, whereas many food production processes occur at elevated temperature. We present in this paper, the discovery, cloning and characterisation of a novel recombinant thermostable gluten degrading enzyme, a proline specific prolyl endoprotease (PEP) from Sphaerobacter thermophiles. The molecular mass of the prolyl endopeptidase was estimated to be 77 kDa by using SDS-PAGE. Enzyme activity assays with a synthetic dipeptide Z-Gly-Pro-p-nitroanilide as the substrate revealed that the enzyme had optimal activity at pH 6.6 and was most active from pH 5.0-8.0. The optimum temperature was 63 °C and residual activity after one hour incubation at 63 °C was higher than 75 %. The enzyme was activated and stabilized by Co²⁺ and inhibited by Mg²⁺, K⁺ and Ca²⁺ followed by Zn²⁺, Na⁺, Mn²⁺, Al³⁺, and Cu²⁺. The K_m and k_cat values of the purified enzyme for different substrates were evaluated. The ability to degrade immunogenic gluten peptides (PQPQLPYPQPQLPY (a-gliadin) and SQQQFPQPQQPFPQQP (γ-hordein)) was also confirmed by enzymatic assays and mass spectrometric analysis of cleavage fragments. Addition of the enzyme during small scale mashing of barley malt reduced the gluten content. The findings here demonstrate the potential of enzyme use during mashing to produce gluten free beer, and provide new insights into the effects of proline specific proteases on gluten degradation.