Yeast alcohol dehydrogenase is inhibited competitively by borate with respect to NAD+. An unusual mechanism of competitive inhibition prevails: the competition for the substrate NAD+ by borate and enzyme. The following evidence supports this conclusion. (1) Much greater inhibition is observed with respect to NAD+ as compared with NADH as substrates. (2) Borate decreases the equilibrium constant of the overall reaction in the direction of ethanol oxidation, therefore, borate enters directly into the overall reaction rather than merely decreases the effectiveness of the catalyst. (3) The Ki values for unrelated enzyme reactions are identical for NAD+. (4) Stopped-flow experiments show burst kinetics only when NAD+ and borate are not premixed. (5) The Ki value is identical with the inverse of the borate-NAD+ complexation constant. (6) The pH dependence of the inhibitor demonstrates that only the B(OH)4-species is inhibiting. These results are consistent with the preferable binding of borate to NAD+ as compared with NADH. These two binding constants were found to be equal to 2000 +/- 60 and 130 +/- 8 M-1, respectively. In contrast to the liver enzyme, the yeast enzyme does not show pre-steady-state burst reactions in the reduction of NAD+. This would indicate that the interconversion of ternary complexes is at least partially rate limiting for the yeast enzyme.