The sulfatase family of enzymes catalyzes hydrolysis of sulfate ester bonds of a wide variety of substrates. Seventeen genes have been identified in this class of sulfatases, many of which are associated with genetic disorders leading to reduction or loss of function of the corresponding enzymes. Amino acid sequence homology suggests that the enzymes have similar overall folds, mechanisms of action, and bivalent metal ion-binding sites. A catalytic cysteine residue, strictly conserved in prokaryotic and eukaryotic sulfatases, is post-translationally modified into a formylglycine. Hydroxylation of the formylglycine residue by a water molecule forming the activated hydroxylformylglycine (a formylglycine hydrate or a gem-diol) is a necessary step for the enzyme's sulfatase activity. Crystal structures of three human sulfatases, arylsulfatases A and B(ARSA and ARSB), and estrone/dehydroepiandrosterone sulfatase or steroid sulfatase (STS), also known as arylsulfatase C, have been determined. While ARSA and ARSB are water-soluble enzymes, STS has a hydrophobic domain and is an integral membrane protein of the endoplasmic reticulum. In this article, we compare and contrast sulfatase structures and revisit the proposed catalytic mechanism in light of available structural and functional data. Examination of the STS active site reveals substrate-specific interactions previously identified as the estrogen-recognition motif. Because of the proximity of the catalytic cleft of STS to the membrane surface, the lipid bilayer has a critical role in the constitution of the active site, unlike other sulfatases.