The 11 beta-hydroxysteroid dehydrogenase (11 beta-HSD) enzymes convert corticosterone and cortisol to 11-dehydrocorticosterone and cortisone, and are thought to convey extrinsic specificity to the mineralocorticoid receptor by limiting access of the relatively more abundant glucocorticoids to it. Two different 11 beta-hydroxysteroid dehydrogenases (11 beta-HSD) have been described and cloned. The liver-type, NADP(+)-dependent 11 beta-HSD-1, has an affinity in the micromolar range and bidirectional activity. The NAD(+)-dependent 11 beta-HSD-2 has a higher affinity, in the nanomolar range, and exhibits only oxidase activity. 11 beta-HSD-2, because of its affinity and co-localization with the mineralocorticoid receptor, is likely to serve as the "gatekeeper" for the mineralocorticoid receptor in the kidney. Although the rat kidney expresses both isoforms, only the high-affinity, NAD(+)-dependent 11 beta-HSD-2 has been reported in the sheep kidney. We found both 11 beta-HSD NAD(+)- and NADP(+)-dependent activities in sheep kidney to be present. The NAD(+)-dependent activity exhibited a Km similar to that reported in the literature, 3.85 +/- 1.28 nM for corticosterone and 21.3 +/- 5.8 for cortisol, was distributed in approximately equal amounts between microsomes and nuclei, and was unidirectional, converting corticosterone to 11-dehydrocorticosterone. The enzyme exhibited prominent substrate inhibition. The NADP(+)-dependent activity had a Km for corticosterone of 4 +/- 1.3 nM for a Km for cortisol of 35.2 +/- 2 nM, 100-fold lower than that described for the 11 beta-HSD-1 in the liver of sheep and other species, and was more prevalent in the microsomes than the nuclei. This enzyme was not inhibited by its substrate. The NAD(+)-dependent activity was approximately 3-10 times greater than the NADP(+)-dependent activity when incubated with 5 nM corticosterone substrate, but had similar activity when incubated with 100 nM substrate concentrations. CHOP cells (a modified Chinese hamster ovary cell line) transiently transfected with the sheep 11 beta-HSD-2 plasmid exhibited a marked preference for NAD+ as co-factor. Oxidation of corticosterone by transfected cells in the presence of NADP+ was present, but minimal; NADP+ did not support the metabolism of cortisol, the primary glucocorticoid of sheep. These data suggest the existence of another NADP(+)-dependent enzyme, 11 beta-HSD-3, which, because of its high affinity and unidirectional oxidase activity, may play a physiological role in the modulation of glucocorticoid binding to both the mineralocorticoid and glucocorticoid receptors.