γ-Glutamyltranspeptidase (GGT) has been widely used as a marker enzyme of hepatic and biliary diseases and relations between various diseases and its activity have been studied extensively. Nevertheless, several of its fundamental enzymatic characteristics had not been elucidated. We obtained homogeneous preparation of GGTs from bacteria, characterized them, and elucidated its physiological function that is common to mammalian cells, using GGT-deficient
E. coli
. Prior to GGT of all living organisms, we also identified catalytic nucleophile of
E. coli
GGT and revealed the post-translational processing mechanism for its maturation, and also its crystal structure was determined. The reaction intermediate was trapped and the structure-based reaction mechanism was presented. As for its application, using its transferase activity, we developed the enzymatic synthesis of various γ-glutamyl compounds that are promising in food, nutraceutical and medicinal industries. We found GGT of
Bacillus subtilis
is salt-tolerant and can be used as a glutaminase, which is important in food industry, to enhance umami of food, such as soy sauce and miso. We succeeded in converting bacterial GGT to glutaryl-7-aminocephalosporanic acid acylase, which is an important enzyme in cephem antibiotics production, by site-directed and random mutagenesis.