RDH10 (retinol dehydrogenase 10) was originally identified from the retinal pigment epithelium and retinal Müller cells. It has retinoid oxidoreductase activity and is thought to play a role in the retinoid visual cycle. A recent study showed that RDH10 is essential for generating retinoic acid at early embryonic stages. The present study demonstrated that wild-type RDH10 catalysed both oxidation of all-trans-retinol and reduction of all-trans-retinal in a cofactor-dependent manner In vitro. In cultured cells, however, oxidation is the favoured reaction catalysed by RDH10. Substitution of any of the predicted key residues in the catalytic centre conserved in the RDH family abolished the enzymatic activity of RDH10 without affecting its protein level. Unlike other RDH members, however, replacement of Ser(197), a key residue for stabilizing the substrate, by glycine and alanine did not abolish the enzymatic activity of RDH10, whereas RDH10 mutants S197C, S197T and S197V completely lost their enzymatic activity. These results suggest that the size of the residue at position 197 is critical for the activity of RDH10. Mutations of the three glycine residues (Gly(43), Gly(47) and Gly(49)) in the predicted cofactor-binding motif (Gly-Xaa(3)-Gly-Xaa-Gly) of RDH10 abolished its enzymatic activity, suggesting that the cofactor-binding motif is essential for its activity. Deletion of the two hydrophobic domains dissociated RDH10 from the membrane and abolished its activity. These studies identified the key residues for the activity of RDH10 and will contribute to the further elucidation of mechanism of this important enzyme.