Dps (DNA protection during starvation) enzymes are a major class of dodecameric proteins that bacteria use to detoxify their cytosol through the uptake of reactive iron species. In the stationary growth phase of bacteria, Dps enzymes are primarily used to protect DNA by biocrystallization. To characterize the wild type Dps protein from Microbacterium arborescens that displays additional catalytic functions (amide hydrolysis and synthesis), we determined the crystal structure to a resolution of 2.05 Å at low iron content. The structure shows a single iron at the ferroxidase center coordinated by an oxo atom, one water molecule, and three ligating residues. An iron-enriched protein structure was obtained at 2 Å and shows the stepwise uptake of two hexahydrated iron atoms moving along channels at the 3-fold axis before a restriction site inside the channels requires removal of the hydration sphere. Supporting biochemical data provide insight into the regulation of this acylamino acid hydrolase. Moreover, the peroxidase activity of the protein was determined. The influence of iron and siderophores on the expression of acylamino acid hydrolase was monitored during several stages of cell growth. Altogether our data provide an interesting view of an unusual Dps-like enzyme evolutionarily located apart from the large Dps sequence clusters.