Human carbonyl reductases 1 and 3 (CBR1 and CBR3) are monomeric NADPH-dependent enzymes of the short-chain dehydrogenase/reductase superfamily. Despite 72% identity in primary structure they exhibit substantial differences in substrate specificity. Recently, the endogenous low molecular weight S-nitrosothiol S-nitrosoglutathione (GSNO) has been added to the broad substrate spectrum of CBR1. The current study initially addressed whether CBR3 could equally reduce GSNO which was not the case. Neither the introduction of residues which contribute to glutathione binding in CBR1, i.e. K106Q and S97V/D98A, nor the exchange C143S, which prevents a theoretical disulfide bond with C227 in CBR3, could engender activity towards GSNO. However, exchanging amino acids 236-244 in CBR3 to correspond to CBR1 was sufficient to engender catalytic activity towards GSNO. Catalytic efficiency was further improved by the exchanges Q142M, C143S, P230W and H270S. Hence, the same residues previously reported as important for reduction of carbonyl compounds appear to be key to CBR1-mediated reduction of GSNO. Furthermore, for CBR1-mediated reduction of GSNO, considerable substrate inhibition at concentrations >5 K(m) was observed. Treatment of CBR1 with GSNO followed by removal of low molecular weight compounds decreased the GSNO reducing activity, suggesting a covalent modification. Treatment with dithiothreitol, but not with ascorbic acid, could rescue the activity, indicating S-glutathionylation rather than S-nitrosation as the underlying mechanism. As C227 has previously been identified as the reactive cysteine in CBR1, the variant CBR1 C227S was generated, which, in comparison to the wild-type protein, displayed a similar k(cat), but a 30-fold higher K(m), and did not show substrate inhibition. Collectively, the results clearly argue for a physiological role of CBR1, but not for CBR3, in GSNO reduction and thus ultimately in regulation of NO signaling. Furthermore, at higher concentrations, GSNO appears to work as a suicide inhibitor for CBR1, probably through glutathionylation of C227.