Helicobacter pylori (H. pylori) gamma-glutamyl transpeptidase (GGT) is a bacterial virulence factor that converts glutamine into glutamate and ammonia, and converts glutathione into glutamate and cysteinylglycine. H. pylori GGT causes glutamine and glutathione consumption in the host cells, ammonia production and reactive oxygen species generation. These products induce cell-cycle arrest, apoptosis, and necrosis in gastric epithelial cells. H. pylori GGT may also inhibit apoptosis and induce gastric epithelial cell proliferation through the induction of cyclooxygenase-2, epidermal growth factor-related peptides, inducible nitric oxide synthase and interleukin-8. H. pylori GGT induces immune tolerance through the inhibition of T cell-mediated immunity and dendritic cell differentiation. The effect of GGT on H. pylori colonization and gastric persistence are also discussed.