The enzyme, 10-formyltetrahydrofolate dehydrogenase (10-FTHFDH) (EC 188.8.131.52) catalyzes both the NADP(+)-dependent oxidation of 10-formyltetrahydrofolate to tetrahydrofolate and CO2 and the NADP(+)-independent hydrolysis of 10-formyltetrahydrofolate to tetrahydrofolate and formate. The COOH-terminal domain of the 10-FTHFDH (residues 417-902) shows a 46% identity with a series of NAD(+)-dependent aldehyde dehydrogenases (EC 184.108.40.206). All known members of the aldehyde dehydrogenase family and 10-FTHFDH have a strictly conserved cysteine (Cys-707 for 10-FTHFDH), which has been predicted to be at the active site of these enzymes. Rat liver 10-FTHFDH was expressed in a baculovirus system, and site-directed mutagenesis has been used to study the role of cysteine 707 in the activity of 10-FTHFDH. 10-FTHFDH with alanine substituted for cysteine at position 707 had no dehydrogenase activity, while hydrolase activity and binding of NADP+ were unchanged. Light scattering analysis revealed that wild type and mutant 10-FTHFDH exist as tetramers. We conclude that cysteine 707 is directly involved in the active site of 10-FTHFDH responsible for dehydrogenase activity, and there is a separate site for the hydrolase activity.