Gamma-glutamyl hydrolase (GGH) is a lysosomal enzyme involved in the metabolism of folates and anti-folates. It acts as an endo- and/or exo-peptidase to cleave gamma-polyglutamate chains that are attached to folates and anti-folates after they enter a mammalian cell. Whereas the addition of multiple glutamates is necessary to enable the cell to retain folates and anti-folates, hydrolysis of the polyglutamate tails by GGH has the opposite effect of making (anti)-folates exportable again. Thus, GGH plays an important role in the cellular homeostasis of folate. Furthermore, high levels of GGH have been associated with cellular resistance to anti-folates, in particular methotrexate. Consequently, GGH also has pharmacological importance. In addition to the intracellular GGH, carboxypeptidase II (also called intestinal folate conjugase, prostate specific membrane antigen or N-acetyl-alpha-linked acidic dipeptidase) is another enzyme with gamma-glutamyl hydrolase activity; it resides, however, in the cellular membrane. Although genetically and biochemically distinct, this enzyme too appears to play a major role in folate homeostasis, by cleaving polyglutamates from extracellular folate-polyglutamates, so that they can be imported into the cell. Finally, there have been reports suggesting that gamma-glutamyl hydrolase plays a role as a tumor marker in breast and lung cancer.