Klotho (KL) family proteins share one or two glycoside hydrolase (GH) motifs homologous to GH family 1. However, the biological significance of GH motifs in KL family proteins remains elusive. We describe here that KL-related protein (KLrP), which is composed of a single GH motif, is a cytosolic β-glucocerebrosidase (GCase, EC 18.104.22.168). We detected a neutral conduritol B epoxide (CBE)-insensitive glucosylceramide (GlcCer)-degrading activity in the cytosol fractions of human fibroblasts, rat brains, and zebrafish embryos. KL family proteins emerged as a potent candidate for the neutral GCase using a bioinformatics approach. Recombinant human KLrP, but not α-KL, β-KL, or KLPH, exhibited GCase activity with a neutral pH optimum in the presence of CBE. We solved the crystal structures of KLrP and a KLrP mutant (E165Q) in complex with glucose, which indicate that KLrP forms a (β/α)8TIM barrel structure with the double-displacement mechanism of the retaining β-glycosidase. Furthermore, knockdown of endogenous KLrP in CHOP cells using small interfering RNA (siRNA) decreased the CBE-insensitive neutral GCase activity and increased the cellular levels of GlcCer, which suggests that KLrP is involved in a novel GlcCer catabolism pathway. A KLrP D106N mutant was discovered in patients with severe Gaucher disease; however, this mutation did not affect the GCase activity of KLrP.