The crystal structure of a ternary complex of meso-2,3-butanediol dehydrogenase with NAD+ and a competitive inhibitor, mercaptoethanol, has been determined at 1.7 A resolution by means of molecular replacement and refined to a final R-factor of 0.194. The overall structure is similar to those of the other short chain dehydrogenase/reductase enzymes. The NAD+ binding site, and the positions of catalytic residues Ser139, Tyr152, and Lys156 are also conserved. The crystal structure revealed that mercaptoethanol bound specifically to meso-2,3-butanediol dehydrogenase. Two residues around the active site, Gln140 and Gly183, forming hydrogen bonds with the inhibitor, are important but not sufficient for distinguishing stereoisomerism of a chiral substrate.