We found that low concentrations of guanidine hydrochloride (GdnHCl, <0.75 M) or urea (<1.5 M) enhanced the enzyme activity of lipocalin-type prostaglandin (PG) D synthase (L-PGDS) maximally 2.5- and 1.6-fold at 0.5 M GdnHCl and 1 M urea, respectively. The catalytic constants in the absence of denaturant and in the presence of 0.5 M GdnHCl or 1 m urea were 22, 57, and 30 min(-1), respectively, and the K(m) values for the substrate, PGH(2), were 2.8, 8.3, and 2.3 microm, respectively, suggesting that the increase in the catalytic constant was mainly responsible for the activation of L-PGDS. The intensity of the circular dichroism (CD) spectrum at 218 nm, reflecting the beta-sheet content, was also increased by either denaturant in a concentration-dependent manner, with the maximum at 0.5 M GdnHCl or 1 M urea. By plotting the enzyme activities against the ellipticities at 218 nm of the CD spectra of L-PGDS in the presence or absence of GdnHCl or urea, we found two states in the reversible folding process of L-PGDS: one is an activity-enhanced state and the other, an inactive state. The NMR analysis of L-PGDS revealed that the hydrogen-bond network was reorganized to be increased in the activity-enhanced state formed in the presence of 0.5 M GdnHCl or 1 m urea and to be decreased but still remain in the inactive intermediate observed in the presence of 2 M GdnHCl or 4 M urea. Furthermore, binding of the nonsubstrate ligands, bilirubin or 13-cis-retinal, to L-PGDS changed from a multistate mode in the native form of L-PGDS to a simple two-state mode in the activity-enhanced form, as monitored by CD spectra of the bound ligands. Therefore, L-PGDS is a unique protein whose enzyme activity and ligand-binding property are biphasically altered during the unfolding process by denaturants.