Gamma-glutamyl hydrolase, a cysteine peptidase, catalyzes the hydrolysis of poly-gamma-glutamate derivatives of folate cofactors and many antifolate drugs. We have used internally quenched fluorogenic derivatives of glutamyl-gamma-glutamate and (4,4-difluoro)glutamyl-gamma-glutamate to examine the effect of fluorine substitution adjacent to the scissile isopeptide bond. Using a newly developed continuous fluorescence assay, the hydrolysis of both substrates could be described by Michaelis-Menten kinetics. Fluorine substitution resulted in a significant decrease in observed rates of hydrolysis under steady-state conditions due primarily to a approximately 15-fold increase in Km. Using stopped-flow techniques, hydrolysis of the non-fluorinated isopeptide was characterized by a burst phase followed by a steady-state rate, indicating that formation of the acyl enzyme is not rate-limiting for hydrolysis of this isopeptide. This conclusion was confirmed by analysis of the progress curves over a wide range of substrate concentration, which demonstrated that the acylation rate (k2) is approximately 10-fold higher than the deacylation rate (k3). The increased value of Km associated with the difluoro derivative limited the ability to obtain comparable pre-steady-state kinetics data at saturating concentration of substrate due to inner filter effects. However, even under nonsaturating conditions, a modest burst was observed for the difluoro derivative. These data indicate that either deacylation or rearrangement of the enzyme-product complex is rate-limiting in this isopeptide hydrolysis reaction.