Most cellular folates carry a short poly-γ-glutamate tail, and this tail is believed to affect their efficacy and stability. The tail can be removed by γ-glutamyl hydrolase (GGH; EC 3.4.19.9), a vacuolar enzyme whose role in folate homeostasis remains unclear. In order to probe the function of GGH, we modulated its level of expression and subcellular location in Arabidopsis plants and tomato fruit. Three-fold overexpression of GGH in vacuoles caused extensive deglutamylation of folate polyglutamates and lowered the total folate content by approximately 40% in Arabidopsis and tomato. No such effects were seen when GGH was overexpressed to a similar extent in the cytosol. Ablation of either of the major Arabidopsis GGH genes (AtGGH1 and AtGGH2) alone did not significantly affect folate status. However, a combination of ablation of one gene plus RNA interference (RNAi)-mediated suppression of the other (which lowered total GGH activity by 99%) increased total folate content by 34%. The excess folate accumulated as polyglutamate derivatives in the vacuole. Taken together, these results suggest a model in which: (i) folates continuously enter the vacuole as polyglutamates, accumulate there, are hydrolyzed by GGH, and exit as monoglutamates; and (ii) GGH consequently has an important influence on polyglutamyl tail length and hence on folate stability and cellular folate content.