Catalyzes the peptide bond hydrolysis in dipeptides, displaying a non-redundant activity toward threonyl dipeptides. Mediates threonyl dipeptide catabolism in a tissue-specific way (By similarity). Has high dipeptidase activity toward cysteinylglycine, an intermediate metabolite in glutathione metabolism. Metabolizes N-lactoyl-amino acids, both through hydrolysis to form lactic acid and amino acids, as well as through their formation by reverse proteolysis. Plays a role in the regulation of cell cycle arrest and apoptosis (By similarity). Hydrolysis of dipeptides, preferentially hydrophobic dipeptides including prolyl amino acids. H2O + L-threonyl-L-threonine = 2 L-threonine H2O + L-threonyl-L-serine = L-serine + L-threonine H2O + L-seryl-L-threonine = L-serine + L-threonine H2O + L-cysteinylglycine = glycine + L-cysteine H2O + L-alanyl-L-cysteine = L-alanine + L-cysteine (S)-lactate + L-phenylalanine = H2O + N-[(S)-lactoyl]-L-phenylalanine Binds 2 manganese ions per subunit. Homodimer. Detected in neuronal cells in the dorsal part of the tuberomammilary nucleus of the posterior hypothalamus (at protein level). Expressed in the iris, ciliary body, trabecular meshwork, Schlemm's canal, sclera, retina, brain, kidney and lung. Belongs to the peptidase M20A family.