Pathogenic bacteria deliver effector proteins into host cells through the type III secretion apparatus to modulate the host function. We identify a family of proteins, homologous to the type III effector Cif from enteropathogenic Escherichia coli, in pathogens including Yersinia, Photorhabdus, and Burkholderia that contain functional type III secretion systems. Like Cif, this family of proteins is capable of arresting the host cell cycle at G(2)/M. Structure of one of the family members, Cif homolog in Burkholderia pseudomallei (CHBP), reveals a papain-like fold and a conserved Cys-His-Gln catalytic triad despite the lack of primary sequence identity. For CHBP and Cif, only the putative catalytic Cys is susceptible to covalent modification by E-64, a specific inhibitor of papain-like cysteine proteases. Unlike papain-like enzymes where the S2 site is the major determinant of cleavage-site specificity, CHBP has a characteristic negatively charged pocket occupying surface areas corresponding to the S1/S1' site in papain-like proteases. The negative charge is provided by a conserved aspartate, and the pocket best fits an arginine, as revealed by molecular docking analysis. Mutation analysis establishes the essential role of the catalytic triad and the negatively charged pocket in inducing cell cycle arrest in host cells. Our results demonstrate that bacterial pathogens have evolved a unique papain-like hydrolytic activity to block the normal host cell cycle progression.