A gene encoding an NADPH-dependent 7 beta-hydroxysteroid dehydrogenase (7 beta-HSDH) from Collinsella aerofaciens DSM 3979 (ATCC 25986, formerly Eubacterium aerofaciens) was identified and cloned in this study. Sequence comparison of the translated amino acid sequence suggests that the enzyme belongs to the short-chain dehydrogenase superfamily. This enzyme was expressed in Escherichia coli with a yield of 330 mg (5,828 U) per liter of culture. The enzyme catalyzes both the oxidation of ursodeoxycholic acid (UDA) forming 7-keto-lithocholic acid (KLA) and the reduction of KLA forming UDA acid in the presence of NADP(+) or NADPH, respectively. In the presence of NADPH, 7 beta-HSDH can also reduce dehydrocholic acid. SDS-PAGE and gel filtration of the expressed and purified enzyme revealed a dimeric nature of 7 beta-HSDH with a size of 30 kDa for each subunit. If used for the oxidation of UDA, its pH optimum is between 9 and 10 whereas for the reduction of KLA and dehydrocholic acid it shows an optimum between pH 4 to 6. Usage of the enzyme for the biotransformation of KLA in a 0.5-g scale showed that this 7 beta-HSDH is a useful biocatalyst for producing UDA from suitable precursors in a preparative scale.