The structure-function relationship of the estrogenic 17 beta-hydroxysteroid dehydrogenase (17 beta-HSD1), a pivotal enzyme in the synthesis of active sex hormones, has been studied via protein chemistry and crystallography. A highly active and homogeneous 17 beta-HSD1 was prepared with a rapid purification from human placenta. We then characterized the native and expressed enzyme, and concluded, for the first time, that 17 beta-HSD1 is formed by two identical subunits. The enzyme was also overproduced in insect cells with a baculovirus expression system. The highly active 17 beta-HSD1 preparation was successfully crystallized in the presence of NADP-, polyethylene glycol, beta-octylglucoside and glycerol, resulting in the first diffraction quality crystals of any steroid-converting enzyme from a human source. The three-dimensional structure of 17 beta-HSD1 was determined at 2.2 A resolution, showing that the overall structure of the enzyme is similar to the other enzymes in the short-chain dehydrogenase family, with a conserved Tyr-X-X-X-Lys sequence and a serine residue in the active site. It is distinguished from the other known structures reported for short-chain dehydrogenases by the insertion of two helix-turn-helix motifs that appear to govern membrane association and substrate specificity [corrected]. More recently, the complex of 17 beta-HSD1 with estradiol has been successfully crystallized and its structure determined. The latter demonstrates detailed information of the interactions between the substrate and residues Ser142, Tyr155, His221 and Glu282 of the enzyme. These interactions and the complementarity of the substrate with the hydrophobic binding pocket make critical contributions to the enzyme specificity. The above results provide a strong basis for the design of potent inhibitors of this pivotal steroid dehydrogenase.