11 beta-Hydroxysteroid dehydrogenase (11-HSD) catalyzes the conversion of cortisol to cortisone and corticosterone to 11-dehydrocorticosterone. This activity may be required to confer normal ligand specificity upon the mineralocorticoid receptor. Although an isozyme of 11-HSD was previously isolated from rat liver, a different isozyme is apparently expressed in mineralocorticoid target tissues. We isolated a sheep kidney cDNA clone encoding this isozyme by expression screening using Xenopus oocytes. The cDNA is 1.8 kilobase pairs in length and encodes a protein of 427 amino acid residues with a predicted M(r) of 46,700. When expressed in oocytes, this enzyme functions as an NAD(+)-dependent 11 beta-dehydrogenase with very high affinity for steroids, but it has no detectable reductase activity. It is 37% identical in amino acid sequence to an NAD(+)-dependent isozyme of 17 beta-hydroxysteroid dehydrogenase but only 20% identical to the NADP(+)-dependent liver isozyme of 11-HSD. It is expressed at high levels in the kidney and adrenal and at lower levels in the colon. The corresponding gene is present in a single copy in the sheep genome. In humans, this gene is a candidate locus for the syndrome of apparent mineralocorticoid excess, a form of hypertension postulated to result from 11-HSD deficiency in mineralocorticoid target tissues.