The liver cytosolic enzyme, 10-formyltetrahydrofolate dehydrogenase (FDH) (EC 220.127.116.11) catalyzes two reactions: 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 enzyme (residues 420-902) is about 48% identical to a family of NAD-dependent aldehyde dehydrogenases (EC 18.104.22.168), and FDH possesses aldehyde dehydrogenase activity. We expressed the COOH-terminal domain (residues 420-902) of FDH in insect cells using a baculovirus expression system. The recombinant protein was released from insect cells to the culture medium and was purified from the medium by a two-step procedure: precipitation with 35% saturated ammonium sulfate followed by chromatography on hydroxyapatite. The purified COOH-terminal domain displayed aldehyde dehydrogenase activity similar to that of native FDH but had neither dehydrogenase nor hydrolase activity toward folate substrates. Aldehyde dehydrogenase activity of the COOH-terminal domain and FDH was independent of the presence of 2-mercaptoethanol while 10-FDDF dehydrogenase activity of FDH occurred only in the presence of 2-mercaptoethanol. The COOH-terminal domain existed as a tetramer showing that the sites for oligomerization of subunits in native FDH resides in this domain. Using titration of tryptophan fluorescence, it was found that the COOH-terminal domain bound NADP+ to the same extent as FDH (Kd 0.2 and 0.3 microM, respectively) but did not bind folate. Both FDH and its COOH-terminal domain also bound NAD+ (Kd 11 and 16 microM, respectively) as measured by fluorescence titration. Both proteins were able to catalyze the aldehyde dehydrogenase reaction utilizing NADP+ or NAD+, but the Km for NAD+ was three orders higher than that for NADP+ (2 mM and 1.5-2.0 microM, respectively). The concentration of NAD+ required for the reaction was high compared with the physiological level of NAD+, suggesting that the reaction does not occur in vivo. NAD+ at physiological concentrations stimulated the aldehyde dehydrogenase reaction performed by FDH or its COOH-terminal domain using NADP+.