An open reading frame located in the bisC-cspA intergenic region, or at 80.1 min on the Escherichia coli chromosome, encodes a hypothetical 2-hydroxyacid dehydrogenase, which was identified as a result of the E. coli Genome Sequencing Project. We report here that the product of the gene (yiaE) is a 2-ketoaldonate reductase (2KR). The gene was cloned and expressed with a C-terminal His tag in E. coli, and the protein was purified by metal-chelate affinity chromatography. The determination of the NH₂-terminal amino acid sequence of the protein defined the translational start site of this gene. The enzyme was found to be a 2KR catalyzing the reduction of 2,5-diketo-D-gluconate to 5-keto-D-gluconate, 2-keto-D-gluconate (2KDG) to D-gluconate, 2-keto-L-gulonate to L-idonate. The reductase was optimally active at pH 7.5, with NADPH as a preferred electron donor. The deduced amino acid sequence showed 69.4% identity with that of 2KR from Erwinia herbicola. Disruption of this gene on the chromosome resulted in the loss of 2KR activity in E. coli. E. coli W3110 was found to grow on 2KDG, whereas the mutant deficient in 2KR activity was unable to grow on 2KDG as the carbon source, suggesting that 2KR is responsible for the catabolism of 2KDG in E. coli and the diminishment of produced 2KDG from D-gluconate in the cultivation of E. coli harboring a cloned gluconate dehydrogenase gene.