We investigated the potential (d)NDP/(d)NTP discrimination mechanisms in nucleotide pyrophosphatases. Here, we report that dUTPase, an essential nucleotide pyrophosphatase, uses a C-terminal P-loop-like sequence in a unique mechanism for substrate discrimination and efficient hydrolysis. Our spectroscopy and transient kinetics results on human dUTPase mutants combined with previous structural studies indicate that ( i ) H-bond interactions between the γ-phosphate and the P-loop-like motif V promote the catalytically competent conformation of the reaction center at the α-phosphate group; ( ii ) these interactions accelerate the chemical step of the kinetic cycle and that ( iii ) hydrolysis occurs very slowly or not at all in the absence of the γ-phosphate—motif V interactions, i.e., in dUDP, dUDP.BeFx, or in the motif V-deleted mutant. The physiological role of dUTPase is to set cellular dUTP∶dTTP ratios and prevent injurious uracil incorporation into DNA. Based upon comparison with related pyrophosphate generating (d)NTPases, we propose that the unusual use of a P-loop-like motif enables dUTPases to achieve efficient catalysis of dUTP hydrolysis and efficient discrimination against dUDP at the same time. These specifics might have been advantageous on the appearance of uracil-DNA repair. The similarities and differences between dUTPase motif V and the P-loop (or Walker A sequence) commonly featured by ATP- and GTPases offer insight into functional adaptation to various nucleotide hydrolysis tasks.