We cloned and sequenced the gene encoding an NADPH-dependent aldehyde reductase (ARII) in Sporobolomyces salmonicolor AKU4429, which reduces ethyl 4-chloro-3-oxobutanoate (4-COBE) to ethyl (S)-4-chloro-3-hydroxybutanoate. The ARII gene is 1,032 bp long, is interrupted by four introns, and encodes a 37,315-Da polypeptide. The deduced amino acid sequence exhibited significant levels of similarity to the amino acid sequences of members of the mammalian 3-hydroxysteroid dehydrogenase-plant dihydroflavonol 4-reductase superfamily but not to the amino acid sequences of members of the aldo-keto reductase superfamily or to the amino acid sequence of an aldehyde reductase previously isolated from the same organism (K. Kita, K. Matsuzaki, T. Hashimoto, H. Yanase, N. Kato, M. C.-M. Chung, M. Kataoka, and S. Shimizu, Appl. Environ. Microbiol. 62:2303-2310, 1996). The ARII protein was overproduced in Escherichia coli about 2,000-fold compared to the production in the original yeast cells. The enzyme expressed in E. coli was purified to homogeneity and had the same catalytic properties as ARII purified from S. salmonicolor. To examine the contribution of the dinucleotide-binding motif G₁₉-X-X-G₂₂-X-X-A₂₅, which is located in the N-terminal region, during ARII catalysis, we replaced three amino acid residues in the motif and purified the resulting mutant enzymes. Substrate inhibition of the G₁₉A and G₂₂A mutant enzymes by 4-COBE did not occur. The A₂₅G mutant enzyme could reduce 4-COBE when NADPH was replaced by an equimolar concentration of NADH.