The biosynthesis of the hormone retinoic acid from retinol (vitamin A) involves two sequential steps, catalyzed by retinol dehydrogenases and retinal dehydrogenases, respectively. This report describes the cloning of a cDNA encoding a heretofore unknown aldehyde dehydrogenase from a rat testis library and its expression in Escherichia coli. This enzyme has been designated retinal dehydrogenase, type II, RalDH(II). The deduced amino acid sequence of RalDH(II) had the highest identity with mammalian aldehyde dehydrogenases that feature low Km values (microM) for retinal: human ALDH1 (72.2%), rat retinal dehydrogenase, type I (71.5%), bovine retina (72.7%), and mouse AHD-2 (71.5%). RalDH(II) expressed in E. coli recognizes as substrates free retinal, with a Km of approximately 0.7 microM, and cellular retinol-binding protein-bound retinal, with a Km of approximately 0.2 microM. RalDH(II) also can utilize as substrate retinal generated in situ by microsomal retinol dehydrogenases, from the physiologically most abundant substrate: retinol bound to cellular retinol-binding protein. Rat testis expresses RalDH(II) mRNA most abundantly, followed by (relative to testis): lung (6.7%), brain (6.3%), heart (5.2%), liver (4.4%), and kidney (2.7%). RalDH(II) does not recognize citral, benzaldehyde, acetaldehyde, and propanal efficiently as substrates, but does metabolize octanal and decanal efficiently. These data support a function for RalDH(II) in the pathway of retinoic acid biogenesis.