Rhodanese catalyzes the sulfur-transfer reaction that transfers sulfur from thiosulfate to cyanide by a double-displacement mechanism, in which an active cysteine residue plays a central role. Previous studies indicated that the phage-shock protein E (PspE) from Escherichia coli is a rhodanese composed of a single active domain and is the only accessible rhodanese among the three single-domain rhodaneses in E. coli. To understand the catalytic mechanism of rhodanese at the molecular level, we determined the solution structures of the sulfur-free and persulfide-intermediate forms of PspE by nuclear magnetic resonance (NMR) spectroscopy and identified the active site by NMR titration experiments. To obtain further insights into the catalytic mechanism, we studied backbone dynamics by NMR relaxation experiments. Our results demonstrated that the overall structures in both sulfur-free and persulfide-intermediate forms are highly similar, suggesting that no significant conformational changes occurred during the catalytic reaction. However, the backbone dynamics revealed that the motional properties of PspE in its sulfur-free form are different from the persulfide-intermediate state. The conformational exchanges are largely enhanced in the persulfide-intermediate form of PspE, especially around the active site. The present structural and biochemical studies in combination with backbone dynamics provide further insights in understanding the catalytic mechanism of rhodanese.