Fluorescence stopped-flow studies were conducted with recombinant rat liver 3 alpha-HSD, an aldo-keto reductase (AKR) that plays critical roles in steroid hormone inactivation, to characterize the binding of nicotinamide cofactor, the first step in the kinetic mechanism. Binding of NADP(H) involved two events: the fast formation of a loose complex (E.NADP(H)), followed by a conformational change in enzyme structure leading to a tightly bound complex (E.NADP(H)), which was observed as a fluorescence kinetic transient. Binding of NAD(H) was not characterized by a similar kinetic transient, implying a difference in the mode of binding of the two cofactors. Unlike previously characterized AKRs, the rates associated with the formation and decay of E.NADP(H) and E.NADP(H) were much faster than kcat for the oxidoreduction of various substrates, indicating that binding and release of cofactor is not rate-limiting overall in 3 alpha-HSD. Mutation of Arg 276, a highly conserved residue in AKRs that forms a salt bridge with the adenosine 2'-phosphate of NADP(H), resulted in large changes in Km and Kd for NADP(H) that were not observed with NAD(H). The loss in free energy associated with the increase in Kd for NADP(H) is consistent with the elimination of an electrostatic link. Importantly, this mutation abolished the kinetic transient associated with NADPH binding. Thus, anchoring of the adenosine 2'-phosphate of NADPH by Arg 276 appears to be obligatory for the fluorescence kinetic transients to be observed. The removal of Trp 86, a residue involved in fluorescence energy transfer with NAD(P)H, also abolished the kinetic transient, but mutation of Trp 227, a residue on a mobile loop associated with cofactor binding, did not. It is concluded that in 3 alpha-HSD, the time dependence of the change in Trp 86 fluorescence is due to cofactor anchoring, and thus, Trp 86 is a distal reporter of this event. Further, the loop movement that accompanies cofactor binding is spectrally silent.