The kinetic mechanism of the major sheep liver aldehyde reductase (ALR1) was studied with three aldehyde substrates: p-nitrobenzaldehyde, pyridine-3-aldehyde and D-glucuronate. In each case the enzyme mechanism was sequential and product-inhibition studies were consistent with an ordered Bi Bi mechanism, with the coenzymes binding to the free enzyme. Binding studies were used to investigate the interactions of substrates, products and inhibitors with the free enzyme. These provided evidence for the binding of D-glucuronate, L-gulonate and valproate, as well as NADP+ and NADPH. The enzyme was inhibited by high concentrations of D-glucuronate in a non-competitive manner, indicating that this substrate was able to bind to the free enzyme and to the E X NADP+ complex at elevated concentrations. Although the enzyme was inhibited by high pyridine-3-aldehyde concentrations, there was no evidence for the binding of this substrate to the free enzyme. Sheep liver ALR1 was inhibited by the ionized forms of alrestatin, sorbinil, valproate, 2-ethylhexanoate and phenobarbitone, indicating the presence of an anion-binding site similar to that described for the pig liver enzyme, which interacts with inhibitors and substrates containing a carboxy group. Sorbinil, valproate and 2-ethylhexanoate inhibited the enzyme uncompetitively at low concentrations and non-competitively at high concentrations, whereas phenobarbitone and alrestatin were non-competitive and uncompetitive inhibitors respectively. The significance of these results with respect to inhibitor and substrate binding is discussed.