Human aldo-keto reductases (AKRs) of the AKR1C subfamily function in vitro as 3-keto-, 17-keto-, and 20-ketosteroid reductases or as 3alpha-, 17beta-, and 20alpha-hydroxysteroid oxidases. These AKRs can convert potent sex hormones (androgens, estrogens, and progestins) into their cognate inactive metabolites or vice versa. By controlling local ligand concentration AKRs may regulate steroid hormone action at the prereceptor level. AKR1C2 is expressed in prostate, and in vitro it will catalyze the nicotinamide adenine dinucleotide (NAD(+))-dependent oxidation of 3alpha-androstanediol (3alpha-diol) to 5alpha-dihydrotestosterone (5alpha-DHT). This reaction is potently inhibited by reduced NAD phosphate (NADPH), indicating that the NAD(+): NADPH ratio in cells will determine whether AKR1C2 makes 5alpha-DHT. In transient COS-1-AKR1C2 and in stable PC-3-AKR1C2 transfectants, 5alpha-DHT was reduced by AKR1C2. However, the transfected AKR1C2 oxidase activity was insufficient to surmount the endogenous 17beta-hydroxysteroid dehydrogenase (17beta-HSD) activity, which eliminated 3alpha-diol as androsterone. PC-3 cells expressed retinol dehydrogenase/3alpha-HSD and 11-cis-retinol dehydrogenase, but these endogenous enzymes did not oxidize 3alpha-diol to 5alpha-DHT. In stable LNCaP-AKR1C2 transfectants, AKR1C2 did not alter androgen metabolism due to a high rate of glucuronidation. In primary cultures of epithelial cells, high levels of AKR1C2 transcripts were detected in prostate cancer, but not in cells from normal prostate. Thus, in prostate cells AKR1C2 acts as a 3-ketosteroid reductase to eliminate 5alpha-DHT and prevents activation of the androgen receptor. AKR1C2 does not act as an oxidase due to either potent product inhibition by NADPH or because it cannot surmount the oxidative 17beta-HSD present. Neither AKR1C2, retinol dehydrogenase/3alpha-HSD nor 11-cis-retinol dehydrogenase is a source of 5alpha-DHT in PC-3 cells.