The shikimate biosynthetic pathway is essential to microorganisms, plants, and parasites but absent from mammals. Therefore, shikimate dehydrogenase (SD) and other enzymes in the pathway are attractive targets for developing nontoxic antimicrobial agents, herbicides, and antiparasite drugs. SD catalyzes the fourth reaction in the pathway, the nicotinamide adenine dinucleotide phosphate- (NADP-) dependent reduction of 3-dehydroshikimic acid to shikimic acid (SA), as well as its reverse, by the transfer of a hydride. Previous structural studies reveal that the enzyme exists in two major conformations, an open and a closed form. For the reaction to occur, it is believed that the catalytic complex assumes the closed conformation. Nonetheless, the only structure containing both SA and NADP+ exhibits an open conformation (PDB entry 2EV9). Here, we present two crystal structures of Aquifex aeolicus SD, including a ternary complex with both SA and NADP+, which assumes the closed conformation and therefore contains a catalytically competent active site. On the basis of preexisting and novel structural and biochemical data, a catalytic mechanism is proposed.