The active site of myo-inositol dehydrogenase (IDH, EC 1.1.1.18) from Bacillus subtilis recognizes a variety of mono- and disaccharides, as well as 1l-4-O-substituted inositol derivatives. It catalyzes the NAD+-dependent oxidation of the axial alcohol of these substrates with comparable kinetic constants. We have found that 4-O-p-toluenesulfonyl-myo-inositol does not act as a substrate for IDH, in contrast to structurally similar compounds such as those bearing substituted benzyl substituents in the same position. X-ray crystallographic analysis of 4-O-p-toluenesulfonyl-myo-inositol and 4-O-(2-naphthyl)methyl-myo-inositol, which is a substrate for IDH, shows a distinct difference in the preferred conformation of the aryl substituent. Conformational analysis of known substrates of IDH suggests that this conformational difference may account for the difference in reactivity of 4-O-p-toluenesulfonyl-myo-inositol in the presence of IDH. A sequence alignment of IDH with the homologous glucose-fructose oxidoreductase allowed the construction of an homology model of inositol dehydrogenase, to which NADH and 4-O-benzyl-scyllo-inosose were docked and the active site energy minimized. The active site model is consistent with all experimental results and suggests that a conserved tyrosine-glycine-tyrosine motif forms the hydrophobic pocket adjoining the site of inositol recognition. Y233F and Y235F retain activity, while Y233R and Y235R do not. A histidine-aspartate pair, H176 and D172, are proposed to act as a dyad in which H176 is the active site acid/base. The enzyme is inactivated by diethyl pyrocarbonate, and the mutants H176A and D172N show a marked loss of activity. Kinetic isotope effect experiments with D172N indicate that chemistry is rate-determining for this mutant.