Streptococcus agalactiae hyaluronate lyase is a virulence factor that helps this pathogen to break through the biophysical barrier of the host tissues by the enzymatic degradation of hyaluronan and certain chondroitin sulfates at beta-1,4 glycosidic linkages. Crystal structures of the native enzyme and the enzyme-product complex were determined at 2.1- and 2.2-A resolutions, respectively. An elongated cleft transversing the middle of the molecule has been identified as the substrate-binding place. Two product molecules of hyaluronan degradation were observed bound to the cleft. The enzyme catalytic site was identified to comprise three residues: His(479), Tyr(488), and Asn(429). The highly positively charged cleft facilitates the binding of the negatively charged polymeric substrate chain. The matching between the aromatic patch of the enzyme and the hydrophobic patch of the substrate chain anchors the substrate chain into degradation position. A pair of proton exchanges between the enzyme and the substrate results in the cleavage of the beta-1,4 glycosidic linkage of the substrate chain and the unsaturation of the product. Phe(423) likely determines the size of the product at the product release side of the catalytic region. Hyaluronan chain is processively degraded from the reducing end toward the nonreducing end. The unsulfated or 6-sulfated regions of chondroitin sulfate can also be degraded in the same manner as hyaluronan.