The gene encoding a novel alcohol dehydrogenase that belongs to the short-chain dehydrogenases/reductases (SDRs) superfamily was identified in the aerobic thermoacidophilic crenarchaeon Sulfolobus acidocaldarius strain DSM 639. The saadh gene was heterologously overexpressed in Escherichia coli, and the protein (SaADH) was purified to homogeneity and characterized. SaADH is a tetrameric enzyme consisting of identical 28,978-Da subunits, each composed of 264 amino acids. The enzyme has remarkable thermophilicity and thermal stability, displaying activity at temperatures up to 75 degrees C and a 30-min half-inactivation temperature of ~90 degrees C, and shows good tolerance to common organic solvents. SaADH has a strict requirement for NAD(H) as the coenzyme, and displays a preference for the reduction of alicyclic, bicyclic and aromatic ketones and alpha-keto esters, but is poorly active on aliphatic, cyclic and aromatic alcohols, and shows no activity on aldehydes. The enzyme catalyses the reduction of alpha-methyl and alpha-ethyl benzoylformate, and methyl o-chlorobenzoylformate with 100% conversion to methyl (S)-mandelate [17% enantiomeric excess (ee)], ethyl (R)-mandelate (50% ee), and methyl (R)-o-chloromandelate (72% ee), respectively, with an efficient in situ NADH-recycling system which involves glucose and a thermophilic glucose dehydrogenase. This study provides further evidence supporting the critical role of the D37 residue in discriminating NAD(H) from NAD(P)H in members of the SDR superfamily.