Ureidoglycollate lyase (UGL, EC 4.3.2.3), which catalyses the degradation of S(-)-ureidoglycollate to urea and glyoxylate, was found in the peroxisomes of marine fish (sardine and mackerel) liver. The enzyme highly purified from sardine liver had an Mr of about 121,000, with two identical subunits. When UGL was purified in the presence of 1 mM-EDTA, a much less active form was obtained. It was markedly activated by bivalent metal ions, particularly by Mn2+. The Mn2+-activated enzyme remained active when free Mn2+ was removed by gel filtration on Sephadex G-50, suggesting that UGL may be a metalloenzyme and the activation resulted from the binding of Mn2+ to the apoenzyme. UGL was found to be essential in peroxisomal urate degradation, since allantoate, the intermediate of urate catabolism, was found to be degraded to urea and glyoxylate in a two-step reaction catalysed by allantoicase (EC 3.5.1.5) and UGL via S(-)-ureidoglycollate as an intermediate in fish liver peroxisomes, but not in a one-step reaction as previously believed.