Cleaves the gamma-glutamyl bond of periplasmic glutathione (gamma-Glu-Cys-Gly), glutathione conjugates, and other gamma-glutamyl compounds. The metabolism of glutathione releases free glutamate and the dipeptide cysteinyl-glycine, which is hydrolyzed to cysteine and glycine by dipeptidases; it may function in amino acid uptake/salvage, or possibly in peptidoglycan linkage. Catalyzes the hydrolysis and transpeptidation of many gamma-glutamyl compounds (including some D-gamma-glutamyl substrates), with a preference for basic and aromatic amino acids as acceptors (PubMed:2877974). The KM values for gamma-glutamyl acceptors are so high that it has been proposed transpeptidation is not the physiological role in E.coli (PubMed:2877974, PubMed:8104180). an alpha-amino acid + an N-terminal (5-L-glutamyl)-[peptide] = 5-L-glutamyl amino acid + N-terminal L-alpha-aminoacyl-[peptide] glutathione + H2O = L-cysteinylglycine + L-glutamate an S-substituted glutathione + H2O = an S-substituted L-cysteinylglycine + L-glutamate Transferase and hydrolase activities are inhibited by L-Ala and L-Gln, and also by GGT affinity labeling reagents such as azaserine and 6-diazo-5-oxo-nor-leucine. Optimum pH is 8.73 for transfer of p-nitroanilide from gamma-GpNA to gly-gly and 9.25 for hydrolysis of gamma-GpNA. Optimum temperature is 50 degrees Celsius for both transferase and hydrolase activities. Sulfur metabolism; glutathione metabolism. This enzyme consists of two polypeptide chains, which are synthesized in precursor form from a single polypeptide. Cleaved by autocatalysis into a large and a small subunit. Loss of growth using exogenous gamma-glutamyl peptides as amino acid sources. Belongs to the gamma-glutamyltransferase family.