NAD(P)-dependent group III alcohol dehydrogenases (ADHs), well known as iron-activated enzymes, generally lose their activities under aerobic conditions due to their oxygen-sensitivities. In this paper, we expressed an extremely thermostable group III ADH from the hyperthermophilic archaeon Pyrococcus horikoshii OT3 (PhADH) heterologously in Escherichia coli. When purified from a culture medium containing nickel, the recombinant PhADH (Ni-PhADH) contained 0.85 +/- 0.01 g-atoms of nickel per subunit. Ni-PhADH retained high activity under aerobic conditions (9.80 U mg(-1)), while the enzyme expressed without adding nickel contained 0.46 +/- 0.01 g-atoms of iron per subunit and showed little activity (0.27 U mg(-1)). In the presence of oxygen, the activity of the Fe2+-reconstituted PhADH prepared from the Ni-PhADH was gradually decreased, whereas the Ni2+-reconstituted PhADH maintained enzymatic activity. These results indicated that PhADH with bound nickel ion was stable in oxygen. The activity of the Ni2+-reconstituted PhADH prepared from the expression without adding nickel was significantly lower than that from the Ni-PhADH, suggesting that binding a nickel ion to PhADH in this expression system contributed to protecting against inactivation during the expression and purification processes. Unlike other thermophilic group III ADHs, Ni-PhADH showed high affinity for NAD(H) rather than NADP(H). Furthermore, it showed an unusually high k (cat) value toward aldehyde reduction. The activity of Ni-PhADH for butanal reduction was increased to 60.7 U mg(-1) with increasing the temperature to 95 A degrees C. These findings provide a new strategy to obtain oxygen-sensitive group III ADHs.