17 beta-Hydroxysteroid dehydrogenase (17 beta-HSD) is an enzyme crucial to the regulation of intracellular levels of biologically active steroid hormones in a variety of tissues. Here, we report the isolation, structure, and characterization of a cDNA encoding the human 17 beta-HSD type 2. A 1.4-kilobase cDNA was identified, and DNA sequence analysis indicated that 17 beta-HSD type 2 was a protein of 387 amino acids with a predicted molecular weight of 42,782. The protein contained an amino-terminal type II signal-anchor motif and a carboxyl-terminal endoplasmic reticulum retention motif, which suggested that 17 beta-HSD type 2 was associated with the membranes of the endoplasmic reticulum. 17 beta-HSD type 2 was capable of catalyzing the interconversion of testosterone and androstenedione as well as estradiol and estrone. The enzyme also demonstrated 20 alpha-HSD activity toward 20 alpha-dihydroprogesterone. The amount of 17 beta-HSD type 2 mRNA in placenta was found to be high. The data suggest that the 17 beta-HSD type 2 cDNA encodes the microsomal 17 beta-HSD of human placenta, described by several laboratories.