Human aldehyde reductase is a NADPH-dependent aldo-keto reductase that is closely related (65% identity) to aldose reductase, an enzyme involved in the pathogenesis of some diabetic and galactosemic complications. In aldose reductase, the active site residue Tyr48 is the proton donor in a hydrogen-bonding network involving residues Asp43/Lys77, while His110 directs the orientation of substrates in the active site pocket. Mutation of the homologous Tyr49 to phenylalamine or histidine (Y49F or Y49H) and of Lys79 to methionine (K79M) in aldehyde reductase yields inactive enzymes, indicating similar roles for these residues in the catalytic mechanism of aldehyde reductase. A H112Q mutant aldehyde reductase exhibited a substantial decrease in catalytic efficiency (kcat/Km) for hydrophilic (average 150-fold) and aromatic substrates (average 4200-fold) and 50-fold higher IC50 values for a variety of inhibitors than that of the wild-type enzyme. The data suggest that His112 plays a major role in determining the substrate specificity of aldehyde reductase, similar to that shown earlier for the homologous His110 in aldose reductase [Bohren, K. M., et. al. (1994) Biochemistry 33, 2021-2032]. Mutation of Ile298 or Val299 affected the kinetic parameters to a much lesser degree. Unlike native aldose reductase, which contains a thiol-sensitive Cys298, neither the I298C or V299C mutant exhibited any thiol sensitivity, suggesting a geometry of the active site pocket different from that in aldose reductase. Also different from aldose reductase, the detection of a significant primary deuterium isotope effect on kcat (1.48 +/- 0.02) shows that nucleotide exchange is only partially rate-limiting. Primary substrate and solvent deuterium isotope effects on the H112Q mutant suggest that hydride and proton transfers occur in two discrete steps with hydride transfer taking place first. Dissociation constants and spectroscopic and fluorimetric properties of nucleotide complexes with various mutants suggest that, in addition to Tyr49 and His112, Lys79 plays a hitherto unappreciated role in nucleotide binding. The mode of inhibition of aldehyde reductase by aldose reductase inhibitors (ARIs) is generally similar to that of aldose reductase and involves binding to the E:NADP+ complex, as shown by kinetic and direct inhibitor-binding experiments. The order of ARI potency was AL1576 (Ki = 60 nM) > tolrestat > ponalrestat > sorbinil > FK366 > zopolrestat > alrestatin (Ki = 148 microM). Our data on aldehyde reductase suggest that the active site pocket significantly differs from that of aldose reductase, possibly due to the participation of the C-terminal loop in its formation.