Geobacillus kaustophilus HTA (Gkau) has two copies of DNA polymerase III genes, polC and polE, which encode two distinct DNA polymerases with presumptive functions in DNA replication and repair, respectively. Here we report the biochemical characterization of recombinant DNA pol E from Gkau. Gkau pol E exhibited an optimum DNA polymerase activity at 50-55 ºC and it remained active at this temperature for up to 3 hours. This enzyme preferred Mn²⁺ over Mg²⁺ for polymerase activity with 2 and 5 mM being optimal concentrations, respectively. Gkau pol E did not display any 3′-5′ exonuclease activity. The DNA binding affinity (K_D.DNA) and apparent dNTP binding affinity (K_m.dNTP) for this enzyme were 24 nM and 150 nM, respectively. Contrary to the expectation, Gkau pol E showed relatively high fidelity of DNA synthesis. However, it extended mismatch containing template-primers, a characteristic reported for some Y-family polymerases. Gkau pol E efficiently carried out strand displacement synthesis of DNA (SDSD). Three residues in putative fingers subdomain, namely, F581, R674 and R675 were identified as essential for SDSD. Structural comparison of the model built Gkau pol E and crystal structure of Gkau pol C revealed subtle differences near the active site, which may tentatively explain why Gkau pol E is responsible for the accommodation of mismatched template-primers by Gkau pol E.