The thermotolerant methylotrophic yeast Hansenula polymorpha has recently been gaining interest as a promising host for bioethanol production due to its ability to ferment xylose, glucose, and cellobiose at elevated temperatures up to 48 degrees C. In this study, we identified and characterized alcohol dehydrogenase 1 of H. polymorpha (HpADH1). HpADH1 seems to be a cytoplasmic protein since no N-terminal mitochondrial targeting extension was detected. Compared to the ADHs of other yeasts, recombinant HpADH1 overexpressed in Escherichia coli exhibited much higher catalytic efficiency for ethanol oxidation along with similar levels of acetaldehyde reduction. HpADH1 showed broad substrate specificity for alcohol oxidation but had an apparent preference for medium chain length alcohols. Both ADH isozyme pattern analysis and ADH activity assay indicated that ADH1 is the major ADH in H. polymorpha DL-1. Moreover, an HpADH1-deleted mutant strain produced less ethanol in glucose or glycerol media compared to wild-type. Interestingly, when the ADH1 mutant was complemented with an HpADH1 expression cassette, the resulting strain produced significantly increased amounts of ethanol compared to wild-type, up to 36.7 g l(-1). Taken together, our results suggest that optimization of ADH1 expression would be an ideal method for developing H. polymorpha into an efficient bioethanol production strain.