Phytochelatin synthase (PCS) is a key enzyme for heavy-metal detoxification in plants. PCS catalyzes the production of glutathione (GSH)-derived peptides (called phytochelatins or PCs) that bind heavy-metal ions before vacuolar sequestration. The enzyme can also hydrolyze GSH and GS-conjugated xenobiotics. In the cyanobacterium Nostoc, the enzyme (NsPCS) contains only the catalytic domain of the eukaryotic synthase and can act as a GSH hydrolase and weakly as a peptide ligase. The crystal structure of NsPCS in its native form solved at a 2.0-A resolution shows that NsPCS is a dimer that belongs to the papain superfamily of cysteine proteases, with a conserved catalytic machinery. Moreover, the structure of the protein solved as a complex with GSH at a 1.4-A resolution reveals a gamma-glutamyl cysteine acyl-enzyme intermediate stabilized in a cavity of the protein adjacent to a second putative GSH binding site. GSH hydrolase and PCS activities of the enzyme are discussed in the light of both structures.