The gene encoding dipeptidase was cloned from Acinetobacter calcoaceticus ATC 23055. Determination of the nucleotide sequence revealed that the gene had an open reading flame of 1,050 bp coding a protein of 350 amino acids. The deduced amino acid sequence showed 48.8% similarity to human renal dipeptidases and conserved two amino acid residues identified in human and pig renal dipeptidases as essential ones for the catalytic activity. Purified recombinant enzyme expressed in Escherichia coli did not hydrolyze the unsaturated dipeptide, glycyldehydrophenylalanine. On the other hand, it preferentially hydrolyzed dipeptides having a D-amino acid, when compared with those having an L-amino acid at the C-terminal. Furthermore, it could not hydrolyze tripeptides. These results indicate that the dipeptidase produced by A. calcoaceticus ATC 23055 has a unique substrate specificity and preferentially hydrolyzes dipeptides having a D-amino acid at the C-terminal.