Human Hep27 was originally isolated from growth-arrested HepG2 cells and identified as a member of the superfamily of short-chain dehydrogenases/reductases (SDR). Its substrate specificity has not been determined, but a cross-species comparison suggests that it occurs in widely divergent species, such as human, Cenorhabditis elegans, Drosophila and Arabidopsis thaliana. In this study, Hep27 was expressed as a His(6) fusion protein, and subjected to a substrate screen, using a compound library of SDR substrates, comprising steroids, retinoids, sugars and carbonyl compounds. Whereas no steroid dehydrogenase or retinoid activity was detected, it was found that Hep27 catalyzed the NADPH-dependent reduction of dicarbonyl compounds, like 3,4-hexanedione and 1-phenyl-1,2-propanedione with similar turnover numbers as DCXR (a mitochondrial dicarbonyl reductase/xylulose reductase). In contrast, Hep27 does not convert sugar substrates like xylulose or threose. Based on its substrate specificity and expression in endothelial tissues, it is suggested that Hep27 functions as a dicarbonyl reductase in enzymatic inactivation of reactive carbonyls, involved in covalent modification of cellular components.