We report characterization of a novel member of the short chain dehydrogenase/reductase superfamily. The 1513-base pair cDNA encodes a 319-amino acid protein. The corresponding gene spans over 26 kilobase pairs on chromosome 2 and contains five exons. The recombinant protein produced using the baculovirus system is localized in the microsomal fraction of Sf9 cells and is an integral membrane protein with cytosolic orientation of its catalytic domain. The enzyme exhibits an oxidoreductase activity toward hydroxysteroids with NAD(+) and NADH as the preferred cofactors. The enzyme is most efficient as a 3alpha-hydroxysteroid dehydrogenase, converting 3alpha-tetrahydroprogesterone (allopregnanolone) to dihydroprogesterone and 3alpha-androstanediol to dihydrotestosterone with similar catalytic efficiency (V(max) values of 13-14 nmol/min/mg microsomal protein and K(m) values of 5-7 microm). Despite approximately 44-47% sequence identity with retinol/3alpha-hydroxysterol dehydrogenases, the enzyme is not active toward retinols. The corresponding message is abundant in human trachea and is present at lower levels in the spinal cord, bone marrow, brain, heart, colon, testis, placenta, lung, and lymph node. Thus, the new short chain dehydrogenase represents a novel type of microsomal NAD(+)-dependent 3alpha-hydroxysteroid dehydrogenase with unique catalytic properties and tissue distribution.