We have previously cloned and sequenced three members of a bile acid-inducible gene family from Eubacterium sp. strain VPI 12708 that encode 27,000-M(r) polypeptides. Two copies of these genes (baiA1 and baiA3) are identical, while the third copy (baiA2) encodes a polypeptide sharing 92% amino acid identity with the baiA1 and baiA3 gene products. We have overexpressed the baiA1 gene in Escherichia coli and analyzed the expressed activity. Thin-layer chromatography of 14C-labeled bile acid products from reactions using cell-free extracts revealed a 3 alpha-hydroxysteroid dehydrogenase activity for the BaiA1 protein. The BaiA1 protein could utilize both NAD+ and NADP+, and the preferred steroid substrate was the cholyl-coenzyme A conjugate rather than free cholic acid. These results show that the BaiA proteins are novel 3 alpha-hydroxysteroid dehydrogenases.