Hydrolyzes the polyglutamate sidechains of pteroylpolyglutamates (PubMed:8621474, PubMed:8343522). Progressively removes gamma-glutamyl residues from pteroylpoly-gamma-glutamate to yield pteroyl-alpha-glutamate (folic acid) and free glutamate. May play an important role in the bioavailability of dietary pteroylpolyglutamates and in the metabolism of pteroylpolyglutamates and antifolates. Exhibits either endo- or exopeptidase activity depending upon the tissue of origin. When secreted, it acts primarily as an endopeptidase (By similarity). (6S)-5,6,7,8-tetrahydrofolyl-(gamma-L-Glu)(n) + (n-1) H2O = (6S)-5,6,7,8-tetrahydrofolate + (n-1) L-glutamate Activity is altered by insulin and estrogen. Optimum pH is from 5 to 7. Homodimer. While its intracellular location is primarily the lysosome, most of the enzyme activity is secreted. Belongs to the peptidase C26 family.