Although IDP02499, a short-chain dehydrogenase/reductase (SDR), was crystallized as an apo-protein, analysis of the initial difference electron density map revealed presence of an unknown modified nicotinamide adenine dinucleotide (NAD) at the coenzyme binding site. Seven of eight molecules in the orthorhombic asymmetric unit of the apo-structure bind the ligand. The chain G, however, coordinates a cacodylate ion (occupancy 0.5) at the site of NAD modification in the 3IJR structure. Observed modification of NAD appears to be a natural (E. coli) covalent attachment of a small molecule resembling acetate to the C4N atom of the cofactor. To explain the density, the PDB was searched and structure of the Drosophila alcohol dehydrogenase (PDB ID 1B15) with an enzyme-bound NAD-ketone adduct was found. Both enzymes share 23 % sequence identity and have 2.2 Å rmsd in the position of their C-alpha atoms. The proteins possess a conserved tyrosine (Y151 in 1B15 and Y193 in 3I3O), which in the Drosophila protein is responsible for deprotonation of the enolic form of the ketone catalyzing a nucleophilic attack of the C-alpha atom to C4N position of NAD and creating the adduct (Benach et al., (1999) JMB 289: 335). Since NAD-acetone could be fitted into the difference density with occupancy between 0.75 and 0.9, the Bacillus protein was refined with this adduct. Presence of this ligand and NAD in the holo-structure of IDP02499 stabilizes the N termini (~25 residues) of the enzyme. This area is known to be disordered or does not exist at all in other SDR. The N-terminal tail restricts flexibility of the residues 226 through 244 of IDP02499 via intramolecular and protein-ligand contacts, whereas in the chain G of 3I3O, where NAD-acetone is absent, this region is disordered. The chains F and H of the binary complex (the 3IJR structure) have their N termini completely modeled. Apparently, co-crystallization of IDP02499 with NAD led to substitution of NAD-acetone, assuming that the protein was still purified with the adduct. Pairwise structural alignment of the two Bacillus SDR structures reveals 0.2-0.4 Å rsmd of their C-alpha atom positions. In both structures there is one Mg2+ per NAD-acetone/NAD, which is coordinated by non-conserved D53, S54 and E78, two waters and the O3B/O3' atom of NAD-acetone/NAD.