Peptidyl-tRNA hydrolase (encoded by pth) is an essential enzyme in all bacteria, where it releases tRNA from the premature translation termination product peptidyl-tRNA. Archaeal genomes lack a recognizable peptidyl-tRNA hydrolase (Pth) ortholog, although it is present in most eukaryotes. However, we detected Pth-like activity in extracts of the archaeon Methanocaldococcus jannaschii. The uncharacterized MJ0051 ORF was shown to correspond to a protein with Pth activity. Heterologously expressed MJ0051 enzyme catalyzed in vitro the cleavage of the Pth substrates diacetyl-[14C]lysyl-tRNA and acetyl-[14C]phenylalanyl-tRNA. On transformation of an Escherichia coli pth(ts) mutant, the MJ0051 gene (named pth2) rescued the temperature-sensitive phenotype of the strain. Analysis of known genomes revealed the presence of highly conserved orthologs of the archaeal pth2 gene in all archaea and eukaryotes but not in bacteria. The phylogeny of pth2 homologs suggests that the gene has been vertically inherited throughout the archaeal and eukaryal domains. Deletions in Saccharomyces cerevisiae of the pth2 (YBL057c) or pth (YHR189w) orthologs were viable, as was the double deletion strain, implying that the canonical Pth and Pth2 enzymes are not essential for yeast viability.