Dipeptide Gly-Pro, a hard-to-degrade and collagenous peptide, is thought to be hydrolysed by prolidases that can work on various X-Pro dipeptides. Here, we found an entirely different type of dipeptidase from Lactobacillus farciminis JCM1097 that cleaves Gly-Pro far more efficiently and with higher specificity than prolidases, and then investigated its properties by use of a recombinant enzyme. Although L. farciminis dipeptidase was expressed in the form of an inclusion body in Escherichia coli at 37 °C, it was smoothly over-expressed in a soluble form at a lower temperature. The maximal Gly-Pro hydrolytic activity was attained in E. coli at 30 °C. In contrast to prolidases that are metallopeptidases showing the modest or marginal activity toward Gly-Pro, this L. farciminis dipeptidase belongs to the cysteine peptidase family C69. Lactobacillus farciminis dipeptidase occurs in cytoplasm and utilizes the side chain of an amino-terminal cysteine residue to perform the nucleophilic attack on the target amide bond between Gly-Pro after processing eight amino acid residues at the N-terminus. Furthermore, L. farciminis dipeptidase is potent enough to synthesize Gly-Pro from Gly and Pro by a reverse reaction. These novel properties could be revealed by virtue of the success in preparing recombinant enzymes in higher yield and in a stable form.