The gene encoding hydroxyisourate hydrolase, a novel ureide-metabolizing enzyme, has been cloned from soybean (Glycine max). The gene encodes a protein that is 560 amino acids in length and contains a 31-amino acid signal sequence at the N terminus that is not present in the mature protein. The presence of two SKL motifs near the C terminus suggests that the protein resides in the peroxisome. This expectation is borne out by results from immunogold electron microscopy, which revealed that hydroxyisourate hydrolase was localized in the peroxisomes of uninfected root nodules. The gene encoding hydroxyisourate hydrolase was expressed in Escherichia coli, and soluble, catalytically active enzyme was purified to homogeneity. Sequence analysis revealed considerable homology with members of the beta-glucosidase family of enzymes. Two glutamate residues, E199 and E408, align with the conserved glutamates that play catalytic roles in the beta-glucosidases. However, the other residues that have been identified by crystallography to interact directly with the substrates in beta-glucosidases are not conserved in hydroxyisourate hydrolase. The E199A and E408A hydroxyisourate hydrolase mutants were devoid of detectable catalytic activity. Analysis of transcripts for hydroxyisourate hydrolase demonstrated that its level of expression was highest in the nodule; mRNA was detectable 12 d after infection and increased until 21 d postinfection, then declined. In a similar manner, immunodetection of hydroxyisourate hydrolase indicated preferential localization in the nodule; the amount of protein detected was maximal at 21 d postinfection. The pattern of expression of hydroxyisourate hydrolase matched that of urate oxidase, and supports the hypothesis that hydroxyisourate hydrolase plays a role in ureide metabolism.