One of the most critical events in the origins of cellular life was the development of lipid membranes. Archaea use isoprenoid chains linked via ether bonds to sn-glycerol 1-phosphate (G1P), whereas bacteria and eukaryotes use fatty acids attached via ester bonds to enantiomeric sn-glycerol 3-phosphate. NAD(P)H-dependent G1P dehydrogenase (G1PDH) forms G1P and has been proposed to have played a crucial role in the speciation of the Archaea. We present here, to our knowledge, the first structures of archaeal G1PDH from the hyperthermophilic methanogen Methanocaldococcus jannaschii with bound substrate dihydroxyacetone phosphate, product G1P, NADPH, and Zn(2+) cofactor. We also biochemically characterized the enzyme with respect to pH optimum, cation specificity, and kinetic parameters for dihydroxyacetone phosphate and NAD(P)H. The structures provide key evidence for the reaction mechanism in the stereospecific addition for the NAD(P)H-based pro-R hydrogen transfer and the coordination of the Zn(2+) cofactor during catalysis. Structure-based phylogenetic analyses also provide insight into the origins of G1PDH.