The first structure of an aldehyde dehydrogenase (ALDH) is described at 2.6 A resolution. Each subunit of the dimeric enzyme contains an NAD-binding domain, a catalytic domain and a bridging domain. At the interface of these domains is a 15 A long funnel-shaped passage with a 6 x 12 A opening leading to a putative catalytic pocket. A new mode of NAD binding, which differs substantially from the classic beta-alpha-beta binding mode associated with the 'Rossmann fold', is observed which we term the beta-alpha,beta mode. Sequence comparisons of the class 3 ALDH with other ALDHs indicate a similar polypeptide fold, novel NAD-binding mode and catalytic site for this family. A mechanism for enzymatic specificity and activity is postulated.