7 alpha-Hydroxysteroid dehydrogenase (7 alpha-HSDH;1 EC 1.1.1.159) is an NAD+-dependent oxidoreductase belonging to the short-chain dehydrogenase/reductase (SDR) 1 family. It catalyzes the dehydrogenation of a hydroxyl group at position 7 of the steroid skeleton of bile acids. The crystal structure of the binary (complexed with NAD+) complex of 7 alpha-HSDH has been solved at 2.3 A resolution by the multiple isomorphous replacement method. The structure of the ternary complex [the enzyme complexed with NADH, 7-oxoglycochenodeoxycholic acid (as a reaction product), and possibly partially glycochenodeoxycholic acid (as a substrate)] has been determined by a difference Fourier method at 1.8 A resolution. The enzyme 7 alpha-HSDH is an alpha/beta doubly wound protein having a Rossmann-fold domain for NAD (H) binding. Upon substrate binding, large conformation changes occur at the substrate binding loop (between the beta F strand and alpha G helix) and the C-terminal segment (residues 250-255). The variable amino acid sequences of the substrate-binding loop appear to be responsible for the wide variety of substrate specificities observed among the enzymes of the SDR family. The crystal structure of the ternary complex of 7 alpha-HSDH, which is the only structure available as the ternary complex among the enzymes of the SDR family, indicates that the highly conserved Tyr159 and Ser146 residues most probably directly interact with the hydroxyl group of the substrates although this observation cannot be definite due to an insufficiently characterized nature of the ternary complex. The strictly conserved Lys163 is hydrogen-bonded to both the 2'- and 3'-hydroxyl groups of the nicotinamide ribose of NAD(H). We propose a new catalytic mechanism possibly common to all the enzymes belonging to the SDR family in which a tyrosine residue (Tyr159) acts as a catalytic base and a serine residue (Ser146) plays a subsidiary role of stabilizing substrate binding.