L-Gulonate 3-dehydrogenase (GDH) catalyzes the NAD(+)-linked dehydrogenation of L-gulonate into dehydro-L-gulonate in the uronate cycle. In this study, we isolated the enzyme and its cDNA from rabbit liver, and found that the cDNA is identical to that for rabbit lens lambda-crystallin except for lacking a codon for Glu(309). The same cDNA species, but not the lambda-crystallin cDNA with the codon for Glu(309), was detected in the lens, which showed the highest GDH activity among rabbit tissues. In addition, recombinant human lambda-crystallin that lacks Glu(309) displays enzymatic properties similar to rabbit GDH. These data indicate that GDH is recruited as lambda-crystallin without gene duplication. An outstanding feature of GDH is modulation of its activity by low concentrations of P(i), which decreases the catalytic efficiency in a dose dependent manner. P(i) also protects the enzyme against both thermal and urea denaturation. Kinetic analysis suggests that P(i) binds to both the free enzyme and its NAD(H)-complex in the sequential ordered mechanism. Furthermore, we examined the roles of Asp(36), Ser(124), His(145), Glu(157 )and Asn(196) in the catalytic function of rabbit GDH by site-directed mutagenesis. The D36R mutation leads to a switch in favor of NADP(H) specificity, suggesting an important role of Asp(36) in the coenzyme specificity. The S124A mutation decreases the catalytic efficiency 500-fold, and the H145Q, N196Q and N195D mutations result in inactive enzyme forms, although the E157Q mutation produces no large kinetic alteration. Thus, Ser(124), His(145) and Asn(196) may be critical for the catalytic function of GDH.