ABSTRACT Thermoanaerobacterium saccharolyticum and Clostridium thermocellum are anaerobic thermophilic bacteria being investigated for their ability to produce biofuels from plant biomass. The bifunctional alcohol and aldehyde dehydrogenase gene, adhE , is present in these bacteria and has been known to be important for ethanol formation in other anaerobic alcohol producers. This study explores the inactivation of the adhE gene in C. thermocellum and T. saccharolyticum . Deletion of adhE reduced ethanol production by >95% in both T. saccharolyticum and C. thermocellum , confirming that adhE is necessary for ethanol formation in both organisms. In both adhE deletion strains, fermentation products shifted from ethanol to lactate production and resulted in lower cell density and longer time to reach maximal cell density. In T. saccharolyticum , the adhE deletion strain lost >85% of alcohol dehydrogenase (ADH) activity. Aldehyde dehydrogenase (ALDH) activity did not appear to be affected, although ALDH activity was low in cell extracts. Adding ubiquinone-0 to the ALDH assay increased activity in the T. saccharolyticum parent strain but did not increase activity in the adhE deletion strain, suggesting that ALDH activity was inhibited. In C. thermocellum , the adhE deletion strain lost >90% of ALDH and ADH activity in cell extracts. The C. thermocellum adhE deletion strain contained a point mutation in the lactate dehydrogenase gene, which appears to deregulate its activation by fructose 1,6-bisphosphate, leading to constitutive activation of lactate dehydrogenase. IMPORTANCE Thermoanaerobacterium saccharolyticum and Clostridium thermocellum are bacteria that have been investigated for their ability to produce biofuels from plant biomass. They have been engineered to produce higher yields of ethanol, yet questions remain about the enzymes responsible for ethanol formation in these bacteria. The genomes of these bacteria encode multiple predicted aldehyde and alcohol dehydrogenases which could be responsible for alcohol formation. This study explores the inactivation of adhE , a gene encoding a bifunctional alcohol and aldehyde dehydrogenase. Deletion of adhE reduced ethanol production by >95% in both T. saccharolyticum and C. thermocellum , confirming that adhE is necessary for ethanol formation in both organisms. In strains without adhE , we note changes in biochemical activity, product formation, and growth.