The bacterial twin-arginine translocation (Tat) system is a protein targeting pathway dedicated to the transport of folded proteins across the cytoplasmic membrane. Proteins transported on the Tat pathway are synthesised as precursors with N-terminal signal peptides containing a conserved amino acid motif. In Escherichia coli, many Tat substrates contain prosthetic groups and undergo cytoplasmic assembly processes prior to the translocation event. A pre-export 'Tat proofreading' process, mediated by signal peptide-binding chaperones, is considered to prevent premature export of some Tat-targeted proteins until all other assembly processes are complete. TorD is a paradigm Tat proofreading chaperone and co-ordinates the maturation and export of the periplasmic respiratory enzyme trimethylamine N-oxide reductase (TorA). Although it is well established that TorD binds directly to the TorA signal peptide, the mechanism of regulation or control of binding is not understood. Previous structural analyses of TorD homologues showed that these proteins can exist as monomeric and domain-swapped dimeric forms. In the present study, we demonstrate that isolated recombinant TorD exhibits a magnesium-dependent GTP hydrolytic activity, despite the absence of classical nucleotide-binding motifs in the protein. TorD GTPase activity is shown to be present only in the domain-swapped homodimeric form of the protein, thus defining a biochemical role for the oligomerisation. Site-directed mutagenesis identified one TorD side-chain (D68) that was important in substrate selectivity. A D68W variant TorD protein was found to exhibit an ATPase activity not observed for native TorD, and an in vivo assay established that this variant was defective in the Tat proofreading process.