2-Keto-3-deoxy- D-gluconate (KDG) is an important intermediate found in various sugars, sugar acids and polysaccharide catabolic pathways. Here, we report that a functionally uncharacterized type-2 malate/L-lactate dehydrogenase family protein (TTHB078) from Thermus thermophilus HB8 catalyzes a novel reaction, NAD(P)H-dependent reductase activity on KDG. This enzyme, designated KdgG, utilizes both NADH and NADPH as electron donors, but higher activity was observed with NADH. Analysis of the reaction product revealed that KdgG catalyzes reversible reduction of KDG to form 3-deoxy-D-mannonate. Molecular phylogenetic analysis indicated that KdgG and its homologs distributed in the genus Thermus form a novel clade among type-2 malate/L-lactate dehydrogenase family proteins.