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Industrial production of antibiotics, such as semisynthetic penicillins and cephalosporins, requires optically pure D-p-hydroxylphenylglycine and its derivatives as important side-chain precursors. To produce optically pure D-amino acids, microbial D-hydantoinase (E.C. 3.5.2.2) is used for stereospecific hydrolysis of chemically synthesized cyclic hydantoins. We report the apo-crystal structure of D-hydantoinase from B. stearothermophilus SD1 at 3.0 A resolution. The structure has a classic TIM barrel fold. Despite an undetectable similarity in sequence, D-hydantoinase shares a striking structural similarity with the recently solved structure of dihydroorotase. A structural comparison of hydantoinase with dihydroorotase revealed that the catalytic chemistry is conserved, while the substrate recognition is not. This structure provides insight into the stereochemistry of enantioselectivity in hydrolysis and illustrates how the enzyme recognizes stereospecific exocyclic substituents and hydrolyzes hydantoins. It should also provide a rationale for further directed evolution of this enzyme for hydrolysis of new hydantoins with novel exocyclic substituents.