The present invention relates to microorganisms and polypeptides for detoxifying aldehydes associated with industrial fermentations. In particular, a heat-stable, NADPH- and iron-dependent alcohol dehydrogenase was cloned from Thermoanaerobacter pseudethanolicus 39E and displayed activity against a number of aldehydes including inhibitory compounds that are produced during the dilute-acid pretreatment process of lignocellulosic biomass before fermentation to biofuels. Methods to use the microorganisms and polypeptides of the invention for improved conversion of bio mass to biofuel are provided as well as use of the enzyme in metabolic engineering strategies for producing longer-chain alcohols from sugars using thermophilic, fermentative microorganisms.