Some amino acids and peptides, which have low solubility in water, become much more soluble following gamma-glutamylation. Compounds become more stable in the blood stream with gamma-glutamylation. Several gamma-glutamyl compounds are known to have favorable physiological effects on mammals. Gamma-glutamylation can improve taste and can stabilize glutamine in aqueous solution. Because of such favorable features, gamma-glutamyl compounds are very attractive. However, only a small number of gamma-glutamyl amino acids have been studied although many other gamma-glutamyl compounds may have characteristics that will benefit humans. This is mainly because gamma-glutamyl compounds have not been readily available. An efficient and simple method of producing various gamma-glutamyl compounds, especially gamma-glutamyl amino acids, using bacterial gamma-glutamyltranspeptidase has been developed. With this method, modifications of reactive groups of the substrate and energy source such as ATP are not required, and a wide-range of gamma-glutamyl compounds can be synthesized. Moreover, bacterial gamma-glutamyltranspeptidase, a catalyst for this method, is readily available from the strain over-producing this enzyme. The superiority of producing gamma-glutamyl compounds with bacterial gamma-glutamyltranspeptidase over other methods of production is discussed.