Aldo-keto reductases of family 2 employ single site replacement Lys-->Arg to switch their cosubstrate preference from NADPH to NADH. X-ray crystal structures of Lys-274-->Arg mutant of Candida tenuis xylose reductase (AKR2B5) bound to NAD+ and NADP+ were determined at a resolution of 2.4 and 2.3A, respectively. Due to steric conflicts in the NADP+-bound form, the arginine side chain must rotate away from the position of the original lysine side chain, thereby disrupting a network of direct and water-mediated interactions between Glu-227, Lys-274 and the cofactor 2'-phosphate and 3'-hydroxy groups. Because anchoring contacts of its Glu-227 are lost, the coenzyme-enfolding loop that becomes ordered upon binding of NAD(P)+ in the wild-type remains partly disordered in the NADP+-bound mutant. The results delineate a catalytic reaction profile for the mutant in comparison to wild-type.