In mycobacteria, polyketide synthases and nonribosomal peptide synthetases (NRPSs) produce complex lipidic metabolites by using a thio-template mechanism of catalysis. In this study, we demonstrate that off-loading reductase (R) domain of mycobacterial NRPSs performs two consecutive [2 + 2]e(-) reductions to release thioester-bound lipopeptides as corresponding alcohols, using a nonprocessive mechanism of catalysis. The first crystal structure of an R domain from Mycobacterium tuberculosis NRPS provides strong support to this mechanistic model and suggests that the displacement of intermediate would be required for cofactor recycling. We show that 4e(-) reductases produce alcohols through a committed aldehyde intermediate, and the reduction of this intermediate is at least 10 times more efficient than the thioester-substrate. Structural and biochemical studies also provide evidence for the conformational changes associated with the reductive cycle. Further, we show that the large substrate-binding pocket with a hydrophobic platform accounts for the remarkable substrate promiscuity of these domains. Our studies present an elegant example of the recruitment of a canonical short-chain dehydrogenase/reductase family member as an off-loading domain in the context of assembly-line enzymology.