A group of fungal exo-beta-(1,3)-glucanases, including that from the human pathogen Candida albicans (Exg), belong to glycosyl hydrolase family 5 that also includes many bacterial cellulases (endo-beta-1, 4-glucanases). Family members, despite wide sequence variations, share a common mechanism and are characterised by possessing eight invariant residues making up the active site. These include two glutamate residues acting as nucleophile and acid/base, respectively. Exg is an abundant secreted enzyme possessing both hydrolase and transferase activity consistent with a role in cell wall glucan metabolism and possibly morphogenesis. The structures of Exg in both free and inhibited forms have been determined to 1.9 A resolution. A distorted (beta/alpha)8 barrel structure accommodates an active site which is located within a deep pocket, formed when extended loop regions close off a cellulase-like groove. Structural analysis of a covalently bound mechanism-based inhibitor (2-fluoroglucosylpyranoside) and of a transition-state analogue (castanospermine) has identified the binding interactions at the -1 glucose binding site. In particular the carboxylate of Glu27 serves a dominant hydrogen-bonding role. Access by a 1,3-glucan chain to the pocket in Exg can be understood in terms of a change in conformation of the terminal glucose residue from chair to twisted boat. The geometry of the pocket is not, however, well suited for cleavage of 1,4-glycosidic linkages. A second glucose site was identified at the entrance to the pocket, sandwiched between two antiparallel phenylalanine side-chains. This aromatic entrance-way must not only direct substrate into the pocket but also may act as a clamp for an acceptor molecule participating in the transfer reaction.