Prolyl oligopeptidase or prolyl endopeptidase (PREP; EC 3.4.21.26) is an atypical serine protease that hydrolyses peptides and peptide hormones after proline in peptides up to around 30 residues long. Evidence suggests an involvement in learning and memory, and the enzyme is implicated in diseases including amnesia and depression. The first crystal structures determined, of the porcine enzyme, provided direct insight into the mechanisms of substrate size selectivity, substrate specificity, and catalysis. However in these structural studies the enzyme is in a closed state, even in the absence of ligand, leaving questions as to how substrates and products can enter and exit the enclosed central cavity that houses the active site. More recent crystal structures of bacterial PREP have captured the enzyme in an open state, revealing the true extent and nature of the structural dynamics involved, and illuminating an induced fit mode of catalysis and regulation. Molecular modeling has further contributed to our understanding of the conformational changes that occur during catalysis. Here we review the data that has led to our current understanding of the structure and dynamics of this biologically and pharmaceutically important enzyme.