The stereospecific oxidative degradation of uric acid to (S)-allantoin has recently been demonstrated to proceed via two unstable intermediates and requires three separate enzymatic reactions. The second step of this reaction, the conversion of 5-hydroxyisourate (HIU) to 2-oxo-4-hydroxy-4-carboxy-5-ureidoimidazoline, is catalyzed by HIU hydrolase (HIUH). The high-resolution crystal structure of HIUH from the opportunistic pathogen Klebsiella pneumoniae (KpHIUH) has been determined. KpHIUH is a homotetrameric protein that, based on sequence and structural similarity, belongs to the transthyretin-related protein family. In addition, the steady-state kinetic parameters for this enzyme and four active-site mutants have been measured. These data provide valuable insight into the functional roles of the active-site residues. Based upon the structural and kinetic data, a mechanism is proposed for the KpHIUH-catalyzed reaction.