While some organisms, including humans, eliminate oxidized purines to get rid of excess nitrogen, for many others the recovery of the purine ring nitrogen is vital. In the so-called ureide pathway, nitrogen is released as ammonia from allantoate through a series of reactions starting with allantoate amidohydrolase (AAH), a manganese-dependent enzyme found in plants and bacteria. We report NMR evidence that the true product of the AAH reaction is S-ureidoglycine, a nonstandard alpha-amino acid that spontaneously releases ammonia in vitro. Using gene proximity and logical genome analysis, we identified a candidate gene (ylbA) for S-ureidoglycine metabolism. The proteins encoded by Escherichia coli and Arabidopsis thaliana genes catalyze the manganese-dependent release of ammonia through hydrolysis of S-ureidoglycine. Hydrolysis then inverts the configuration and yields S-ureidoglycolate. S-Ureidoglycine aminohydrolase (UGHY) is cytosolic in bacteria, whereas in plants it is localized, like allantoate amidohydrolase, in the endoplasmic reticulum. These findings strengthen the basis for the known sensitivity of the ureide pathway to Mn availability and suggest a further rationale for the active transport of Mn in the endoplasmic reticulum of plant cells.