Prokaryotic nanocompartments, also known as encapsulins, are a recently discovered proteinaceous organelle-like compartment in prokaryotes that compartmentalize cargo enzymes. While initial studies have begun to elucidate the structure and physiological roles of encapsulins, bioinformatic evidence suggests that a great diversity of encapsulin nanocompartments remains unexplored. Here, we describe a novel encapsulin in the freshwater cyanobacterium PCC 7942. This nanocompartment is upregulated upon sulfate starvation and encapsulates a cysteine desulfurase enzyme via an N-terminal targeting sequence. Using cryo-electron microscopy, we have determined the structure of the nanocompartment complex to 2.2 Å resolution. Lastly, biochemical characterization of the complex demonstrated that the activity of the cysteine desulfurase is enhanced upon encapsulation. Taken together, our discovery, structural analysis, and enzymatic characterization of this prokaryotic nanocompartment provide a foundation for future studies seeking to understand the physiological role of this encapsulin in various bacteria.