We have identified an activity in rabbit reticulocyte lysate as peptidyl-tRNA hydrolase, based upon its ability to hydrolyze native reticulocyte peptidyl-tRNA, isolated from polyribosomes, and N-acylaminoacyl-tRNA, and its inability to hydrolyze aminoacyl-tRNA, precisely the same substrate specificity previously reported for peptidyl-tRNA hydrolase from bacteria or yeast. The physiological role of the reticulocyte enzyme may be to hydrolyze and recycle peptidyl-tRNA that has dissociated prematurely from elongating ribosomes, as suggested for the bacterial and yeast enzymes, since reticulocyte peptidyl-tRNA hydrolase is completely incapable of hydrolyzing peptidyl-tRNA that is still bound to polyribosomes. We have purified reticulocyte peptidyl-tRNA hydrolase over 5,000-fold from the postribosomal supernatant with a yield of 14%. The purified product shows a 72-kDa band upon sodium dodecyl sulfate-polyacrylamide gel electrophoresis that has co-purified with enzyme activity and comprises about 90% of the total stained protein, strongly suggesting that the 72-kDa protein is the enzyme. Sucrose density gradient analysis indicates an apparent molecular mass for the native enzyme of 65 kDa, implying that it is a single polypeptide chain. The enzyme is almost completely inactive in the absence of a divalent cation: Mg2+ (1-2 mM) promotes activity best, Mn2+ is partly effective, and Ca2+ and spermidine are ineffective. The hydrolase shows a Km of 0.60 microM and Vmax of 7.1 nmol/min/mg with reticulocyte peptidyl-tRNA, a Km of 60 nM and Vmax of 14 nmol/min/mg with Escherichia coli fMet-tRNA(fMet), and a Km of 100 nM and Vmax of 2.2 nmol/min/mg with yeast N-acetyl-Phe-tRNA(Phe). The enzyme has a pH optimum of 7.0-7.25, it is inactivated by heat (60 degrees C for 5 min), and its activity is almost completely inhibited by pretreatment with N-ethylmaleimide or incubation with 20 mM phosphate. The fact that the enzyme hydrolyzes E. coli but not yeast or reticulocyte fMet-tRNA(fMet) may be explained, at least in part, by structural similarities between prokaryotic tRNA(fMet) and eukaryotic elongator tRNA that are not shared by eukaryotic tRNA(fMet).