In complex with the cosubstrate UDP-N-acetylglucosamine (UDP-GlcNAc),O-linked-GlcNAc transferase (OGT) catalyzes Ser/ThrO-GlcNAcylation of many cellular proteins and proteolysis of the transcriptional coregulator HCF-1. Such a dual glycosyltransferase-protease activity, which occurs in the same active site, is unprecedented and integrates both reversible and irreversible forms of protein post-translational modification within one enzyme. Although occurring within the same active site, we show here that glycosylation and proteolysis occur through separable mechanisms. OGT consists of tetratricopeptide repeat (TPR) and catalytic domains, which, together with UDP-GlcNAc, are required for both glycosylation and proteolysis. Nevertheless, a specific TPR domain contact with the HCF-1 substrate is critical for proteolysis but not Ser/Thr glycosylation. In contrast, key catalytic domain residues and even a UDP-GlcNAc oxygen important for Ser/Thr glycosylation are irrelevant for proteolysis. Thus, from a dual glycosyltransferase-protease, essentially single-activity enzymes can be engineered both in vitro and in vivo. Curiously, whereas OGT-mediated HCF-1 proteolysis is limited to vertebrate species, invertebrate OGTs can cleave human HCF-1. We present a model for the evolution of HCF-1 proteolysis by OGT.