Gamma-glutamyl transpeptidase (GGT, EC 2.3.2.2) catalyzes the transfer of the gamma-glutamyl group of glutathione and related gamma-glutamyl amides to water (hydrolysis) or to amino acids and peptides (transpeptidation) and plays a central role in glutathione metabolism. GGT is involved in a number of biological events, such as drug resistance and metastasis of cancer cells by detoxification of xenobiotics and reactive oxygen species through glutathione metabolism, and is also implicated in physiological disorders, such as Parkinson's disease, neurodegerative disease, diabetes, and cardiovascular diseases. In this study, we designed, synthesized, and evaluated a series of gamma-phosphono diester analogues of glutamate as transition-state mimic inhibitors of GGT. The electrophilic phosphonate diesters served as highly potent mechanism-based inhibitors that caused the time-dependent and irreversible inhibition of both the E. coli and human enzymes, probably by phosphonylating the catalytic Thr residue of the enzyme. In particular, one of the inhibitors exhibited more than 6000 times higher activity toward human GGT than acivicin, a classical but nonselective inhibitor of GGT. The dependence of the inactivation rate on the leaving group ability of the phosphonates (Brønsted plot) revealed that the phosphonylation of the catalytic Thr residue proceeded via a dissociative transition-state with substantial bond cleavage between the phosphorus and the leaving group for both E. coli and human GGTs. The binding site of GGT for the Cys-Gly moiety of glutathione or for the acceptor molecules was probed by the phosphonate diesters to reveal a significant difference in the mechanism of substrate recognition between E. coli and human GGT. Thus, in the human enzyme, a specific residue in the Cys-Gly binding site played a critical role in recognizing the Cys-Gly moiety or the acceptor molecules by interacting with the C-terminal carboxy group, whereas the Cys side chain and the Cys-Gly amide bond were not recognized significantly. In contrast, the E. coli enzyme was a nonselective enzyme that accommodated substrates without specifically recognizing the C-terminal carboxy group of the Cys-Gly moiety of gamma-glutamyl compounds or the acceptor molecules. The phosphonate diester-based GGT inhibitors shown here should serve as a blue print for the future design of highly selective GGT inhibitors for use as drug leads and biological probes that gain insight into the hitherto undefined physiological roles of GGT and the relationships between GGT and a variety of diseases.