Escherichia coli alkaline phosphatase (AP) is a proficient phosphomonoesterase with two Zn 2+ ions in its active site. Sequence homology suggests a distant evolutionary relationship between AP and alkaline phosphodiesterase/nucleotide pyrophosphatase, with conservation of the catalytic metal ions. Furthermore, many other phosphodiesterases, although not evolutionarily related, have a similar active site configuration of divalent metal ions in their active sites. These observations led us to test whether AP could also catalyze the hydrolysis of phosphate diesters. The results described herein demonstrate that AP does have phosphodiesterase activity: the phosphatase and phosphodiesterase activities copurify over several steps; inorganic phosphate, a strong competitive inhibitor of AP, inhibits the phosphodiesterase and phosphatase activities with the same inhibition constant; a point mutation that weakens phosphate binding to AP correspondingly weakens phosphate inhibition of the phosphodiesterase activity; and mutation of active site residues substantially reduces both the mono-and diesterase activities. AP accelerates the rate of phosphate diester hydrolysis by 10 11 -fold relative to the rate of the uncatalyzed reaction [(k cat / K m )/k w ]. Although this rate enhancement is substantial, it is at least 10 6 -fold less than the rate enhancement for AP-catalyzed phosphate monoester hydrolysis. Mutational analysis suggests that common active site features contribute to hydrolysis of both phosphate monoesters and phosphate diesters. However, mutation of the active site arginine to serine, R166S, decreases the monoesterase activity but not the diesterase activity, suggesting that the interaction of this arginine with the nonbridging oxygen(s) of the phosphate monoester substrate provides a substantial amount of the preferential hydrolysis of phosphate monoesters. The observation of phosphodiesterase activity extends the previous observation that AP has a low level of sulfatase activity, further establishing the functional interrelationships among the sulfatases, phosphatases, and phosphodiesterases within the evolutionarily related AP superfamily. The catalytic promiscuity of AP could have facilitated divergent evolution via gene duplication by providing a selective advantage upon which natural selection could have acted.Two divalent metal ions are a common active site feature found in a number of evolutionarily distinct classes of enzymes, including enzymes that catalyze the hydrolysis of phosphate monoesters, diesters, and triesters (for reviews, see refs 1 and 2). The structural similarity shared by these active sites raises the possibility that a single active site with two divalent metal ions might be able to catalyze these different classes of reactions. However, the partial negative charge on a phosphoryl oxygen atom of the phosphate monoester dianion is lost upon conversion to a diester monoanion, and the steric bulk of the added esterifying group of the diester could result in steric clashes with...