Hyperthermophilic Thermotoga spp. are excellent candidates for the biosynthesis of cellulosic ethanol producing strains because they can grow optimally at 80 °C with ability to degrade and utilize cellulosic biomass. In T. neapolitana (Tne), a putative iron-containing alcohol dehydrogenase was, for the first time, revealed to be a bifunctional aldehyde/alcohol dehydrogenase (Fe-AAdh) that catalyzed both reactions from acetyl-coenzyme A (ac-CoA) to acetaldehyde (ac-ald), and from ac-ald to ethanol, while the putative aldehyde dehydrogenase (Aldh) exhibited only CoA-independent activity that oxidizes ac-ald to acetic acid. The biochemical properties of Fe-AAdh were characterized, and bioinformatics were analyzed. Fe-AAdh exhibited the highest activities for the reductions of ac-CoA and acetaldehyde at 80-85 °C, pH 7.54, and had a 1-h half-life at about 92 °C. The Fe-AAdh gene is highly conserved in Thermotoga spp., Pyrococcus furiosus and Thermococcus kodakarensis, indicating the existence of a fermentation pathway from ac-CoA to ethanol via acetaldehyde as the intermediate in hyperthermophiles.