L-aspartyl and L-asparaginyl residues in proteins spontaneously undergo intra-residue rearrangements forming isoaspartyl/beta-aspartyl residues linked through their side-chain beta-carboxyl group with the following amino acid. In order to avoid accumulation of isoaspartyl dipeptides left over from protein degradation, some bacteria have developed specialized isoaspartyl/beta-aspartyl zinc dipeptidases sequentially unrelated to other peptidases, which also poorly degrade alpha-aspartyl dipeptides. We have expressed and crystallized the 390 amino acid residue isoaspartyl dipeptidase (IadA) from E.coli, and have determined its crystal structure in the absence and presence of the phosphinic inhibitor Asp-Psi[PO(2)CH(2)]-LeuOH. This structure reveals an octameric particle of 422 symmetry, with each polypeptide chain organized in a (alphabeta)(8) TIM-like barrel catalytic domain attached to a U-shaped beta-sandwich domain. At the C termini of the beta-strands of the beta-barrel, the two catalytic zinc ions are surrounded by four His, a bridging carbamylated Lys and an Asp residue, which seems to act as a proton shuttle. A large beta-hairpin loop protruding from the (alphabeta)(8) barrel is disordered in the free peptidase, but forms a flap that stoppers the barrel entrance to the active center upon binding of the dipeptide mimic. This isoaspartyl dipeptidase shows strong topological homology with the alpha-subunit of the binickel-containing ureases, the dinuclear zinc dihydroorotases, hydantoinases and phosphotriesterases, and the mononuclear adenosine and cytosine deaminases, which all are catalyzing hydrolytic reactions at carbon or phosphorous centers. Thus, nature has adapted an existing fold with catalytic tools suitable for hydrolysis of amide bonds to the binding requirements of a peptidase.