In several Leishmania spp., resistance to methotrexate and other drugs is often associated with amplification of the chromosomal H region in the form of extrachromosomal H circles. We report here that the H circle of Leishmania tarentolae contains an 867 bp open reading frame, ltdh, which mediates high levels of resistance to methotrexate and other antifolates, after transfection. The predicted amino acid sequence of the ltdh gene product has significant similarities to a family of short-chain dehydrogenases, enzymes that are involved in several oxido-reduction reactions in a wide range of organisms. To resist antifolates, Leishmania amplifies the ltdh gene as part of the H circle. We propose that LTDH might be involved in an alternative pathway for the synthesis of reduced folates and that ltdh overproduction represents a novel mechanism for resistance to antifolates. Our results support the hypothesis that the H region of the Leishmania genome contains several drug resistance genes and that preferential amplification of this region has evolved as a defense mechanism against cytotoxic drugs.