The kinetics of the NAD+-dependent oxidation of aldehydes, catalysed by aldehyde dehydrogenase purified from sheep liver mitochondria, were studied in detail. Lag phases were observed in the assays, the length of which were dependent on the enzyme concentration. The measured rates after the lag phase was over were directly proportional to the enzyme concentration. If enzyme was preincubated with NAD+, the lag phase was eliminated. Double-reciprocal plots with aldehyde as the variable substrate were non-linear, showing marked substrate activation. With NAD+ as the variable substrate, double-reciprocal plots were linear, and apparently parallel. Double-reciprocal plots with enzyme modified with disulfiram (tetraethylthiuram disulphide) or iodoacetamide, such that at pH 8.0 the activity was decreased to 50% of the control value, showed no substrate activation, and the plots were linear. At pH 7.0, the kinetic parameters Vmax. and Km NAD+- for the oxidation of acetaldehyde and butyraldehyde by the native enzyme are almost identical. Formaldehyde and propionaldehyde show the same apparent maximum rate. Aldehyde dehydrogenase is able to catalyse the hydrolysis of p-nitrophenyl esters. This esterase activity was stimulated by both NAD+ and NADH, the maximum rate for the NAD+ stimulated esterase reaction being roughly equal to the maximum rate for the oxidation of aldehydes. The mechanistic implications of the above behaviour are discussed.