D-3-Hydroxybutyrate dehydrogenase, which catalyzes the reversible reaction between D-3-hydroxybutyrate and acetoacetate, has been classified into the short-chain dehydrogenase/reductase family and is a useful marker in the assay of diabetes mellitus and/or ketoacidosis. The enzyme from Alcaligenes faecalis was crystallized in the apo form and in the holo form with acetate as a substrate analogue. The crystal structures of both forms were determined at 2.2 angstroms resolution. The enzyme is a tetramer composed of four subunits assembled with noncrystallographic 222 point symmetry. Each subunit has two domains. The principal domain adopts the Rossmann fold essential for nucleotide binding, which is a common feature of the SDR family. NAD+ is bound in a large cleft in the domain. The pyrophosphate group of NAD+ is covered by the small additional domain, which is supported by two extended arms allowing domain movement. In the catalytic site, a water molecule is trapped by the catalytic Tyr155 and Ser142 residues in the vicinity of the bound NAD+ and acetate. The substrate analogue acetate is bound above the nicotinamide plane. A substrate (D-3-hydroxybutylate) bound model can reasonably be constructed by adding two C atoms into the void space between the water O atom and the methyl group of the acetate, suggesting a substrate-bound state before enzymatic reaction occurs. Based on these structural features, a reaction mechanism has been proposed.