Prolyl oligopeptidase (POP) has emerged as a drug target for neurological diseases. A flexible loop structure comprising loop A (res. 189-209) and loop B (res. 577-608) at the domain interface is implicated in substrate entry to the active site. Here we determined the kinetic and structural properties of POP with mutations in loop A, loop B and in two additional flexible loops. POP lacking loop A proved to be an inefficient enzyme as did POP with a mutation in loop B (T590C). Both constructs displayed an altered substrate preference profile. Ligand binding become markedly degraded. Conversely, the T202C mutation increased the flexibility of loop A, enhancing the catalytic efficiency beyond that of the native enzyme. The T590C mutation in loop B increased the preference for shorter peptides, indicating a role in substrate gating. Loop A and the His loop housing the catalytic histidine are disordered in the H680A mutant crystal structure, implying coordinated structural dynamics of these loops. A 17-mer peptide could not inhibit variants possessing malfunctioning loop A. This substrate may bind non-productively to an exosite involving loop A or to an open enzyme form. Biophysical studies suggest that mammalian POP resides in a predominantly closed conformational state, especially at physiological conditions. The flexible loop A, loop B and His loop system at the active site is the main regulator of substrate gating and specificity and represents a new inhibitor target.