ABSTRACT: Hydroxyacid dehydrogenases of lactic acid bacteria, which catalyze the stereospecific reduction of branched-chain 2-keto acids to 2-hydroxyacids, are of interest in a variety of fields, including cheese flavor formation via amino acid catabolism. In this study, we used both targeted and random mutagenesis to identify the genes responsible for the reduction of 2-keto acids derived from amino acids in Lactococcus lactis. The gene panE, whose inactivation suppressed hydroxyisocaproate dehydrogenase activity, was cloned and overexpressed in Escherichia coli, and the recombinant His-tagged fusion protein was purified and characterized. The gene annotated panE was the sole gene responsible for the reduction of the 2-keto acids derived from leucine, isoleucine, and valine, while ldh, encoding L-lactate dehydrogenase, was responsible for the reduction of the 2-keto acids derived from phenylalanine and methionine. The kinetic parameters of the His-tagged PanE showed the highest catalytic efficiencies with 2-ketoisocaproate, 2-ketomethylvalerate, 2-ketoisovalerate, and benzoylformate (V(max)/K(m) ratios of 6,640, 4,180, 3,300, and 2,050 U/mg/mM, respectively), with NADH as the exclusive coenzyme. For the reverse reaction, the enzyme accepted d-2-hydroxyacids but not l-2-hydroxyacids. Although PanE showed the highest degrees of identity to putative NADP-dependent 2-ketopantoate reductases (KPRs), it did not exhibit KPR activity. Sequence homology analysis revealed that, together with the d-mandelate dehydrogenase of Enterococcus faecium and probably other putative KPRs, PanE belongs to a new family of D-2-hydroxyacid dehydrogenases which is unrelated to the well-described D-2-hydroxyisocaproate dehydrogenase family. Its probable physiological role is to regenerate the NAD(+) necessary to catabolize branched-chain amino acids, leading to the production of ATP and aroma compounds.