The mRNA encoding a putative human enzyme named Epidermal Retinol Dehydrogenase 2 (RDH-E2) was found to be significantly elevated in psoriatic skin [Y. Matsuzaka, K. Okamoto, H. Tsuji, T. Mabuchi, A. Ozawa, G. Tamiya, H. Inoko, Identification of the hRDH-E2 gene, a novel member of the SDR family, and its increased expression in psoriatic lesion, Biochem. Biophys. Res. Commun. 297 (2002) 1171-1180]. This finding led the authors to propose that RDH-E2 may be involved in the pathogenesis of psoriasis through its potential role in retinoic acid biosynthesis and stimulation of keratinocyte proliferation. However, enzymatic activity for RDH-E2 has never been demonstrated. RDH-E2 is a member of the short-chain dehydrogenase/reductase (SDR) superfamily of proteins, and is most closely related to the group of SDRs comprised of both NAD(+)- and NADP(+)-dependent enzymes with activities toward retinoid and steroid substrates. In this study, we began the characterization of RDH-E2 protein in order to determine whether it might play a role in retinoic acid biosynthesis. The results of this study show that, similarly to other SDR-type retinol dehydrogenases, RDH-E2 appears to be associated with the membranes of endoplasmic reticulum. Furthermore, RDH-E2 expressed in Sf9 insect cells as a fusion to the C-terminal His(6)-tag and purified using Ni(2+)-affinity chromatography recognizes all-trans-retinol and all-trans-retinaldehyde as substrates and exhibits a strong preference for NAD(+)/NADH as cofactors. Specific activity of RDH-E2 toward all-trans-retinoids is much lower than that of other retinoid-active SDRs, such as human RoDH4 or RDH10. The preference for NAD(+) suggests that RDH-E2 is likely to function in the oxidative direction in vivo, further supporting its potential role in the oxidation of retinol to retinaldehyde for retinoic acid biosynthesis in human keratinocytes.