Human gene for pancreas protein 2 (PAN2) is a novel member of the short-chain dehydrogenase/reductase gene superfamily. The properties of PAN2 protein have not yet been characterized. We present the first evidence that human PAN2 is a ubiquitously expressed microsomal enzyme that recognizes retinoids but not steroids as substrates with the apparent K m values between 0.08 μM and 0.4 μM. PAN2 is ~4-fold more efficient in the reductive than in the oxidative direction. The apparent K m values for NADP + and NADPH are 0.65 μM and 0.32 μM versus 1200 μM and 1060 μM for NAD + and NADH, respectively. Kinetic constants and expression pattern of PAN2 suggest that it is likely to function as a reductase in vivo and might contribute to the reduction of retinaldehyde to retinol in most human tissues.