Chloroplast ferredoxin-NADP⁺reductase has a 32,000-fold preference for NADPH over NADH, consistent with its main physiological role of NADP⁺ photoreduction for de novo carbohydrate biosynthesis. Although it is distant from the 2′-phosphoryl group of NADP⁺, replacement of the C-terminal tyrosine (Tyr³⁰⁸ in the pea enzyme) by Trp, Phe, Gly, and Ser produced enzyme forms in which the preference for NADPH over NADH was decreased about 2-, 10-, 300-, and 400-fold, respectively. Remarkably, in the case of the Y308S mutant, thek _cat value for the NADH-dependent activity approached that of the NADPH-dependent activity of the wild-type enzyme. Furthermore, difference spectra of the NAD⁺ complexes revealed that the nicotinamide ring of NAD⁺ binds at nearly full occupancy in the active site of both the Y308G and Y308S mutants. These results correlate well with thek _cat values obtained with these mutants in the NADH-ferricyanide reaction. The data presented support the hypothesis that specific recognition of the 2′-phosphate group of NADP(H) is required but not sufficient to ensure a high degree of discrimination against NAD(H) in ferredoxin-NADP⁺ reductase. Thus, the C-terminal tyrosine enhances the specificity of the reductase for NADP(H) by destabilizing the interaction of a moiety common to both coenzymes, i.e. the nicotinamide.