Most lysosomal hydrolytic enzymes reach their destination via the mannose-6-phosphate (M6P) pathway. The enzyme N-acetylglucosamine-1-phosphodiester α-N-acetylglucosaminidase (NAGPA, or "uncovering enzyme") catalyzes the second step in the M6P tag formation, namely the removal of the masking N-acetylglucosamine (GlcNAc) portion. Defects in this protein are associated with non-syndromic stuttering. To gain a better understanding of the function and regulation of this enzyme, we determined its crystal structure. The propeptide binds in a groove on the globular catalytic domain, blocking active site access. High-affinity substrate binding is enabled by a conformational switch in an active site loop. The protein recognizes the GlcNAc and phosphate portions of its substrate, but not the mannose moiety of the glycan. Based on enzymatic and 1H-NMR analysis, a catalytic mechanism is proposed. Crystallographic and solution scattering analyses suggest that the C-terminal domain forms a long flexible stem that extends the enzyme away from the Golgi membrane.