NAD(P)-dependent dehydrogenases differ according to their coenzyme preference: some prefer NAD, others NADP, and still others exhibit dual cofactor specificity. The structure of a newly identified archaeal homoserine dehydrogenase showed this enzyme to have a strong preference for NADP. However, NADP did not act as a cofactor with this enzyme, but as a strong inhibitor of NAD-dependent homoserine oxidation. Structural analysis and site-directed mutagenesis showed that the large number of interactions between the cofactor and the enzyme are responsible for the lack of reactivity of the enzyme towards NADP. This observation suggests this enzyme exhibits a new variation on cofactor binding to a dehydrogenase: very strong NADP binding that acts as an obstacle to NAD(P)-dependent dehydrogenase catalytic activity.