Aldehyde/alcohol dehydrogenases (ADHEs) are bifunctional enzymes that commonly produce ethanol from acetyl-CoA with acetaldehyde as intermediate, and play a key role in anaerobic redox balance in many fermenting bacteria. ADHEs are also present in photosynthetic unicellular eukaryotes, where their physiological role and regulation are however largely unknown. Herein we provide the first molecular and enzymatic characterization of the ADHE from the photosynthetic microalga Chlamydomonas reinhardtii. Purified recombinant ADHE catalyzed the reversible NADH-mediated interconversions of acetyl-CoA, acetaldehyde and ethanol, but seemed to be poised towards the production of ethanol from acetaldehyde. Phylogenetic analysis of the algal fermentative enzyme supports a vertical inheritance from a cyanobacterial-related ancestor. ADHE was located in the chloroplast where it associated in dimers and higher order oligomers. Electron microscopy analysis of ADHE-enriched stromal fractions revealed fine spiral structures, similar to bacterial ADHE spirosomes. Protein blots showed that ADHE is regulated under oxic conditions. Upregulation is observed in cells exposed to diverse physiological stresses, including zinc deficiency, nitrogen starvation, and inhibition of carbon concentration/fixation capacity. Analyses of the overall proteome and fermentation profiles revealed that cells with increased ADHE abundance exhibit better survival under dark anoxia. This likely relates to the fact that greater ADHE abundance appeared to coincide with enhanced starch accumulation, which might reflect ADHE-mediated anticipation of anaerobic survival.