Phthalate esters (PAEs) are emerging hazardous and toxic chemicals that are extensively used as plasticizers or additives. Diethyl phthalate (DEP) and dimethyl phthalate (DMP), two kinds of PAEs, have been listed as the priority pollutants by many countries. PAE hydrolases are the most effective enzymes in PAE degradation, among which family IV esterases are predominate. However, only a few PAE hydrolases have been characterized, and as far as we know, no crystal structure of any PAE hydrolases of the family IV esterases is available to date. HylD1 is a PAE hydrolase of the family IV esterases, which can degrade DMP and DEP. Here, the recombinant HylD1 was characterized. HylD1 maintained a dimer in solution, and functioned under a relatively wide pH range. The crystal structures of HylD1 and its complex with monoethyl phthalate were solved. Residues involved in substrate binding were identified. The catalytic mechanism of HylD1 mediated by the catalytic triad Ser140-Asp231-His261 was further proposed. The hylD1 gene is widely distributed in different environments, suggesting its important role in PAEs degradation. This study provides a better understanding of PAEs hydrolysis, and lays out favorable bases for the rational design of highly-efficient PAEs degradation enzymes for industrial applications in future. Environmental implicationPhthalate esters (PAEs) are the global hazardous pollutants which are widespread in various environments due to the extensive usage of plastic products. Many countries have listed some PAEs, including diethyl phthalate (DEP) and dimethyl phthalate (DMP), as the priority pollutants. Hence, degradation and elimination of environmental PAEs are widely concerned. Herein, the crystal structures of the DMP and DEP hydrolase HylD1 were solved, and the catalytic mechanism of HylD1 mediated by the catalytic triad Ser140-Asp231-His261 was proposed, which lays a foundation for the rational design of highly-efficient PAEs degrading enzymes for industrial applications in future.