S-2-Hydroxyacylglutathione hydrolase (glyoxalase II) from rat erythrocytes is a specific thiolesterase. Chemical modification studies with phenylmethanesulfonic acid, N-ethylmaleimide, and 5,5'-dithiobis(2-nitrobenzoate) suggest that glyoxalase II does not have a serine or a cysteine residue at the active site. The effect of pH on the rate of hydrolysis of S-lactoylglutathione indicates the existence of an active-site residue, pK = 8.87, essential for binding of the substrate. Inactivation studies with phenylglyoxal implicate the existence of an active-site arginine residue that also is essential for binding of the substrate. The effects of pD on the rate of hydrolysis of S-lactoylglutathione in D2O give no evidence for general acid-general base catalysis. 1H NMR studies of the glyoxalase II catalyzed hydrolysis of S-mandeloylglutathione show no evidence for a carbanion (E1cB) mechanism. the catalytic role of glyoxalase II appears to involve direct nucleophilic attack of the thiol ester by an active-site histidine residue, based upon inactivation experiments using diethyl pyrocarbonate and photoinactivation with methylene blue.