A novel bacterial strain (BS20T), which has ginsenoside-transforming ability, was whole genome sequenced for the identification of a target gene. After complete genome sequencing, phylogenetic, phenotypic and chemotaxonomic analyses, the strain BS20T (Arachidicoccus ginsenosidimutans sp. nov.) was placed within the genus Arachidicoccus of family Chitinophagaceae. The complete genome of strain BS20T comprised a circular chromosome of 4[thin space (1/6-em)]138[thin space (1/6-em)]017 bp. To find the target functional gene, 17 sets of four different glycoside hydrolases were cloned in E. coli BL21 (DE3) using the pGEX4T-1 vector and were characterized. Among these 17 sets of clones, only one, BglAg-762, exhibited ginsenoside-conversion ability. The BglAg-762 comprised 762 amino acid residues and belonged to the glycoside hydrolase family 3. The recombinant enzyme (GST-BglAg-762) was able to convert major ginsenosides Rb1 to F2 via gypenoside-XVII (Gyp-XVII), Rb2 to C-O, and Rb3, Rc, Rd, and Gyp-XVII to C-Mx1, C-Mc1, and F2, respectively. Finally, ginsenoside F2 was transformed into compound K (C-K). Besides, these pilot data demonstrate the identification of 17 sets of target/functional genes of 4 different glycoside hydrolases from a novel bacterial species via whole genome sequencing. Our results have shown that the recombinant BglAg-762 very quickly converts the major ginsenosides into minor ginsenosides, which can be used for the enhanced production of target minor ginsenosides. Furthermore, the web service of NCBI is suitable for any targeted gene identification, but based on our experimental analysis we concluded that the hypothetical protein present in NCBI should be considered as a putative or uncharacterized protein.