Glycosidases are phylogenetically widely distributed enzymes that are crucial for the cleavage of glycosidic bonds. In this work, we present the unexpected properties of a putative resurrected ancestor of bacterial and eukaryotic family-1 glycosidases. The ancestral protein shares the TIM-barrel fold with its modern descendants but displays large regions with greatly enhanced conformational flexibility. Yet, the barrel core remains comparatively rigid and the ancestral glycosidase activity is stable, with an optimum temperature within the experimental range for thermophilic family-1 glycosidases. Remarkably, the ancestral glycosidase binds heme tightly and stoichiometrically at a well-defined buried site, a novel feature that has not been previously described in any glycosidase. Heme binding rigidifies this TIM-barrel and allosterically enhances glycosidase activity. These results demonstrate the capability of ancestral protein reconstruction to reveal valuable but unexpected biomolecular features when sampling distant sequence space. The unusual combination of biochemical and biophysical properties makes this ancestral protein a promising scaffold for further bioengineering applications ranging from the generation of de novo enzymatic activities to the design of custom biosensors.