5'-nucleotidases catalyze the hydrolytic dephosphorylation of nucleoside monophosphates. As catabolic enzymes they contribute significantly to the regulation of cellular nucleotide levels; misregulation of nucleotide metabolism and nucleotidase deficiencies are associated with a number of diseases. The seven human 5'-nucleotidases differ with respect to substrate specificity and cellular localization. Recently, the novel cytosolic 5'-nucleotidase III-like protein, or cN-IIIB, has been characterized in human and Drosophila. cN-IIIB exhibits a strong substrate preference for the modified nucleotide 7-methylguanosine monophosphate but the structural reason for this preference was unknown. Here, we present crystal structures of cN-IIIB from Drosophila melanogaster bound to the reaction products 7-methylguanosine or cytidine. The structural data reveal that the cytosine- and 7-methylguanine moieties of the products are stacked between two aromatic residues in a coplanar but off-centered position. 7-methylguanosine is specifically bound through π-π interactions and distinguished from unmodified guanosine by additional cation-π coulomb interactions between the aromatic side chains and the positively charged 7-methylguanine. Notably, the base is further stabilized by T-shaped edge-to-face stacking of an additional tryptophan packing perpendicularly against the purine ring and forming, together with the other aromates, an aromatic slot. The structural data in combination with site-directed mutagenesis experiments reveal the molecular basis for the broad substrate specificity of cN-IIIB but also explain the substrate preference for 7-methylguanosine monophosphate. Analyzing the substrate specificities of cN-IIIB and the main pyrimidine 5'-nucleotidase cN-IIIA by mutagenesis studies, we show that cN-IIIA dephosphorylates the purine m7GMP as well, hence redefining its substrate spectrum. Docking calculations with cN-IIIA and m7GMP as well as biochemical data reveal that Asn69 does not generally exclude the turnover of purine substrates thus correcting previous suggestions.