Most Gram-positive bacteria inhabiting the gastrointestinal tract are capable of hydrolysing bile salts. Bile salt hydrolysis is thought to play an important role in various biological processes in the host. Therefore, correct annotation of bacterial bile salt hydrolases (Bsh) in public databases (EC 220.127.116.11) is of importance, especially for lactobacilli, which are considered to play a major role in bile salt hydrolysis in vivo. In the present study, all enzymes listed in public databases that belong to the Bsh family and the closely related penicillin V acylase (Pva; EC 18.104.22.168) family were compared with the sequences annotated as Bsh in Lactobacillus plantarum WCFS1, as an example. In Gram-positive bacteria, a clear distinction was made between the two families using sequence alignment, phylogenetic clustering, and protein homology modelling. Biochemical and structural data on experimentally verified Bsh and Pva enzymes were used for validation of function prediction. Hidden Markov models were constructed from the sequence alignments to enable a more accurate prediction of Bsh-encoding genes, and their distinction from those encoding members of the Pva family. Many Pva-related sequences appeared to be annotated incorrectly as Bsh in public databases. This refinement in the annotation of Bsh family members influences the prediction of the function of bsh-like genes in species of the genus Lactobacillus, and it is discussed in detail.