The glyoxalase system constitutes the major pathway for the detoxification of metabolically produced cytotoxin methylglyoxal (MG) into a non-toxic metabolite d-lactate. Glyoxalase I (GLY I) is an evolutionarily conserved metalloenzyme requiring divalent metal ions for its activity: Zn2+ in the case of eukaryotes or Ni2+ for enzymes of prokaryotic origin. Plant GLY I proteins are part of a multimember family; however, not much is known about their physiological function, structure and metal dependency. In this study, we report a unique GLY I (OsGLYI-11.2) from Oryza sativa (rice) that requires Ni2+ for its activity. Its biochemical, structural and functional characterization revealed it to be a monomeric enzyme, possessing a single Ni2+ coordination site despite containing two GLY I domains. The requirement of Ni2+ as a cofactor by an enzyme involved in cellular detoxification suggests an essential role for this otherwise toxic heavy metal in the stress response. Intriguingly, the expression of OsGLYI-11.2 was found to be highly substrate inducible, suggesting an important mode of regulation for its cellular levels. Heterologous expression of OsGLYI-11.2 in Escherichia coli and model plant Nicotiana tabacum (tobacco) resulted in improved adaptation to various abiotic stresses caused by increased scavenging of MG, lower Na+/K+ ratio and maintenance of reduced glutathione levels. Together, our results suggest interesting links between MG cellular levels, its detoxification by GLY I, and Ni2+ – the heavy metal cofactor of OsGLYI-11.2, in relation to stress response and adaptation in plants.