Prokaryotic mycothiol-dependent formaldehyde dehydrogenase has been structurally characterized by peptide analysis of the 360-residue protein chain and by molecular modelling and functional correlation with the conformational properties of zinc-containing alcohol dehydrogenases. The structure is found to be a divergent medium-chain dehydrogenase/reductase (MDR), at a phylogenetic position intermediate between the cluster of dimeric alcohol dehydrogenases of all classes (including the human foims), and several tetrameric reductaseddehydrogenases. Molecular modelling and functionally important residues suggest a fold of the mycothiol-dependent formaldehyde dehydrogenase related overall to that of MDR alcohol dehydrogenases, with the presence of the catalytic and structural zinc atoms, but otherwise much altered active-site relationships compatible with the different substrate specificity, and an altered loop structure compatible with differences in the quaternary structure. Residues typical of glutathione binding in class-I11 alcohol dehydrogenase are not present, consistent with that the mycothiol factor is not closely similar to glutathione. The molecular architecture is different from that of the 'constant' alcohol dehydrogenases (of class-111 type) and the 'variable' alcohol dehydrogenases (of class-I and class-I1 types), further supporting the unique structure of mycothiol-dependent formaldehyde dehydrogenase. Borders of internal chain-length differences between this and other MDR enzymes coincide in different combinations, supporting the concept of limited changes in loop regions within this whole family of proteins.