Salmonella enterica uses a bacterial microcompartment (MCP) for coenzyme B(12)-dependent 1,2-propanediol (1,2-PD) utilization (Pdu). The Pdu MCP consists of a protein shell that encapsulates enzymes and cofactors required for metabolizing 1,2-PD as a carbon and energy source. Here we show that the PduQ protein of S. enterica is an iron-dependent alcohol dehydrogenase used for 1,2-PD catabolism. PduQ is also demonstrated to be a new component of the Pdu MCP. In addition, a series of in vivo and in vitro studies show that a primary function of PduQ is to recycle NADH to NAD(+) internally within the Pdu MCP in order to supply propionaldehyde dehydrogenase (PduP) with its required cofactor (NAD(+)). Genetic tests determined that a pduQ deletion mutant grew slower than wild-type Salmonella on 1,2-PD and that this phenotype was not complemented by a non-MCP associated Adh2 from Zymomonas that catalyzes the same reaction. This suggests that PduQ has a MCP-specific function. We also found that a pduQ deletion mutant had no growth defect in a genetic background having a second mutation that prevents MCP formation which further supports a MCP-specific role for PduQ. Moreover, studies with purified Pdu MCPs demonstrated that the PduQ enzyme can convert NADH to NAD(+) to supply the PduP reaction in vitro. Cumulatively, these studies show that the PduQ enzyme is used to recycle NADH to NAD(+) internally within the Pdu MCP. To our knowledge, this is the first report of internal recycling as a mechanism for cofactor homeostasis within a bacterial MCP.