gamma-Glutamyltranspeptidase is the key enzyme in glutathione metabolism, and we previously presented evidence suggesting that it belongs to the N-terminal nucleophile hydrolase superfamily. Enzymatically active gamma-glutamyltranspeptidase, which consists of one large subunit and one small subunit, is generated from an inactive common precursor through post-translational proteolytic processing. The processing mechanism for gamma-glutamyltranspeptidase of Escherichia coli K-12 has been analyzed by means of in vitro studies using purified precursors. Here we show that the processing of a precursor of gamma-glutamyltranspeptidase is an intramolecular autocatalytic event and that the catalytic nucleophile for the processing reaction is the oxygen atom of the side chain of Thr-391 (N-terminal residue of the small (beta) subunit), which is also the nucleophile for the enzymatic reaction.