lndole‐3‐acetaldehyde reductase (lAAld reductase EC 1.2.3.1) from Phycomyces blakesleeanus Bgff., a 38 kDa polypeptide as determined by gel filtration, is probably localized in the cytoplasm. The formation of indole‐3‐ethanol (lEt) is dependent on the presence of NAD(P)H. The enzymatic reduction of IAAId shows a pH optimum between 6 and 8 and a temperature optimum at 30°C. Enzyme activity follows Michaelis Menten kinetic (K_m= 200 μM for IAAId; K_m= 24 μM for NADPH). The isoelectric point of the IAAId reductase is at pH 5.4. Phenylacetaldehyde and benzaldehyde are competitive substrates. Hydroxymeihylindole promotes the reductive IEt formation, whereas NADP⁺ is a non‐competitive inhibitor. Changes in lAAJd reductase activity correlate with certain developmental stages of the fungus.