Background: NADP-dependent malate dehydrogenase (EC 1.1.1.82) is a light-activated chloroplast enzyme that functions in the C-4 pathway of photosynthesis. The light regulation is believed to be mediated in vivo by thioredoxin-catalyzed reduction and re-oxidation of cystine residues. TI The rates of reversible activation and inactivation of the enzyme are strongly influenced by the coenzyme substrates that seem to ultimately determine the steady-state extent of activation in vivo. Results: The X-ray structure of the inactive, oxidized enzyme was determined at 2.8 Angstrom resolution. The core structure is homologous to NAD-dependent malate dehydrogenases. Two surface-exposed and thioredoxin-accessible disulfide bonds are present, one in the N-terminal extension and the other in the C-terminal extension. The C-terminal peptide of the inactive, oxidized enzyme is constrained by its disulfide bond to fold into the active site over NADP(+), hydrogen bonding to the catalytic His225 as well as obstructing access of the C-4 acid substrate. Two loops flanking the active site, termed the Arg(2) and Trp loops, that contain the C-4 acid substrate binding residues are prevented from closing by the C-terminal extension. Conclusions: The structure explains the role of the C-terminal extension in inhibiting activity. The negative C terminus will interact more strongly with the positively charged nicotinamide of NADP(+) than NADPH, explaining why the coenzyme-binding affinities of the enzyme differ so markedly from those of all other homologous alpha-hydroxy acid dehydrogenases. NADP(+) may also slow dissociation of the C terminus upon reduction, providing a mechanism for the inhibition of activation by NADP(+) but not NADPH.