Two proteins from the amidohydrolase superfamily of enzymes were cloned, expressed, and purified to homogeneity. The first protein, Cc0300, was from Caulobacter crescentus CB-15 (Cc0300), while the second one (Sgx9355e) was derived from an environmental DNA sequence originally isolated from the Sargasso Sea ( gi|44371129 ). The catalytic functions and the substrate profiles for the two enzymes were determined with the aid of combinatorial dipeptide libraries. Both enzymes were shown to catalyze the hydrolysis of l-Xaa-l-Xaa dipeptides in which the amino acid at the N-terminus was relatively unimportant. These enzymes were specific for hydrophobic amino acids at the C-terminus. With Cc0300, substrates terminating in isoleucine, leucine, phenylalanine, tyrosine, valine, methionine, and tryptophan were hydrolyzed. The same specificity was observed with Sgx9355e, but this protein was also able to hydrolyze peptides terminating in threonine. Both enzymes were able to hydrolyze N-acetyl and N-formyl derivatives of the hydrophobic amino acids and tripeptides. The best substrates identified for Cc0300 were l-Ala-l-Leu with k(cat) and k(cat)/K(m) values of 37 s(-1) and 1.1 x 10(5) M(-1) s(-1), respectively, and N-formyl-l-Tyr with k(cat) and k(cat)/K(m) values of 33 s(-1) and 3.9 x 10(5) M(-1) s(-1), respectively. The best substrate identified for Sgx9355e was l-Ala-l-Phe with k(cat) and k(cat)/K(m) values of 0.41 s(-1) and 5.8 x 10(3) M(-1) s(-1). The three-dimensional structure of Sgx9355e was determined to a resolution of 2.33 A with l-methionine bound in the active site. The alpha-carboxylate of the methionine is ion-paired to His-237 and also hydrogen bonded to the backbone amide groups of Val-201 and Leu-202. The alpha-amino group of the bound methionine interacts with Asp-328. The structural determinants for substrate recognition were identified and compared with other enzymes in this superfamily that hydrolyze dipeptides with different specificities.