Agrobacterium tumefaciens strain C58 can utilize d-galacturonate as a sole source of carbon via a pathway in which the first step is oxidation of d-galacturonate to D-galactaro-1,5-lactone. We have identified a novel enzyme, D-galactarolactone isomerase (GLI), that catalyzes the isomerizaton of D-galactaro-1,5-lactone to D-galactaro-1,4-lactone. GLI, a member of the functionally diverse amidohydrolase superfamily, is a homologue of LigI that catalyzes the hydrolysis of 2-pyrone-4,6-dicarboxylate in lignin degradation. The ability of GLI to catalyze lactone isomerization instead of hydrolysis can be explained by the absence of the general basic catalysis used by 2-pyrone-4,6-dicarboxylate lactonase.