A thermostable 7α-hydroxysteroid dehydrogenase from Bacteroides fragilis ATCC 25285 was found to catalyze the reduction of various benzaldehyde analogues to their corresponding benzyl alcohols. The enzyme activity was dependent upon the substituent on the benzene ring of the substrates. Benzaldehydes with electron-withdrawing substituent usually showed higher activity than those with electron-donating groups. Furthermore, this enzyme was tolerant to some organic solvents. These results together with previous studies suggested that 7α-hydroxysteroid dehydrogenase from B. fragilis might play multiple functional roles in biosynthesis and metabolism of bile acids, and in the detoxification of xenobiotics containing carbonyl groups in the large intestine. In addition, its broad substrate spectrum offers great potential for finding applications not only in the synthesis of steroidal compounds of pharmaceutical importance, but also for the production of other high-value fine chemicals.