A novel cold-active S-formylglutathione hydrolase (SfSFGH) from Shewanella frigidimarina, composed of 279 amino acids with a molecular mass of ~31.0 kDa was identified, expressed, and characterized. Sequence analysis of SfSFGH revealed a conserved pentapeptide of G-X-S-X-G that is found in various lipolytic enzymes along with a putative catalytic triad of Ser148-Asp224-His257. Activity analysis showed that SfSFGH was active towards short-chain esters, such as p-nitrophenyl acetate, butyrate, hexanoate, and octanoate. The optimum pH for enzyme activity was slightly alkaline (pH 8.0). To investigate the active site configuration of SfSFGH, we determined the crystal structure of SfSFGH at 2.32 ? resolution. Structural analysis showed that a Trp182 residue is located in the active site entrance, allowing it to act as a gatekeeper residue to control substrate binding in SfSFGH. Mutation of Trp182 to Ala allowed SfSFGH to accommodate a longer chain of substrates. It is thought that the W182A mutation may increase the substrate-binding pocket and decrease the steric effect for larger substrates in SfSFGH. Consequently, the W182A mutant has broader substrate specificity compared to wild-type SfSFGH. Moreover, SfSFGH displayed more than 50% of its initial activity in the presence of various chemicals, including 30% EtOH, 1% Triton X-100, 1% SDS, and 5 M urea. Taken together, this study provides useful structure-function data of a SFGH family member and may inform protein engineering strategies for industrial applications of SfSFGH.