The cellular levels of methylglyoxal (MG), a toxic byproduct of glycolysis, rise under various abiotic stresses in plants. Detoxification of MG is primarily through the glyoxalase pathway. The first enzyme of the pathway, glyoxalase I (GLYI), is a cytosolic metalloenzyme requiring either Ni or Zn for its activity. Plants possess multiple GLYI genes, of which only some have been partially characterized; hence, the precise molecular mechanism, subcellular localization and physiological relevance of these diverse isoforms remain enigmatic. Here, we report the biochemical properties and physiological role of a putative chloroplast-localized GLYI enzyme, OsGLYI-8, from rice, which is strikingly different from all hitherto studied GLYI enzymes in terms of its intracellular localization, metal dependency and kinetics. In contrast to its predicted localization, OsGLYI-8 was found to localize in the nucleus along with its substrate, MG. Further, OsGLYI-8 does not show a strict requirement for metal ions for its activity, is functional as a dimer and exhibits unusual biphasic steady-state kinetics with a low-affinity and a high-affinity substrate-binding component. Loss of AtGLYI-2, the closest Arabidopsis ortholog of OsGLYI-8, results in severe germination defects in the presence of MG and growth retardation under salinity stress conditions. These defects were rescued upon complementation with AtGLYI-2 or OsGLYI-8. Our findings thus provide evidence for the presence of a GLYI enzyme and MG detoxification in the nucleus.