Cytosolic aldo-keto reductase that catalyzes NADPH-dependent reduction of ketosteroids to hydroxysteroids. Displays broad substrate specificity with distinct positional and stereochemistry, primarily generating 3alpha-hydroxysteroids, but also 3beta-, 17beta- and 20alpha-hydroxysteroids (PubMed:8920937, PubMed:9716498, PubMed:10998348, PubMed:12416991, PubMed:11995921, PubMed:12604236, PubMed:14672942, PubMed:19218247, PubMed:21802064, PubMed:11514561, PubMed:15929998, PubMed:17034817, PubMed:17442338, PubMed:24434280). Required for male sex determination as a component of the 'backdoor' androgen biosynthesis pathway that generates 5alpha-dihydrotestosterone (5alpha-DHT) via pregnanes. Acts together with AKR1C4 to convert 5alpha-dihydroprogesterone (5alpha-DHP) to 3alpha-hydroxy-5alpha- pregnan-20-one (3alpha,5alpha-THP/allopregnanolone), leading to 5alpha- DHT secretion necessary for embryonic gonad differentiation into testis (PubMed:12416991, PubMed:21802064). In androgen catabolism, may predominantly act as a phase I enzyme by introducing a hydroxyl group prior to conjugation. It can nevertheless participate in the alternative phase II pathway by directly reducing sulfate- or glucuronide-conjugated androgens (PubMed:10998348, PubMed:11514561, PubMed:14672942, PubMed:15929998, PubMed:19218247, PubMed:24434280). In neurosteroid biosynthesis, may preferentially reduce 5alpha- dihydroprogesterone (5-alpha-DHP) and 5alpha-dihydrodeoxycorticosterone (5-alpha-DHDOC) precursors to 3alpha-hydroxy-5alpha-pregnan-20-one (3alpha,5alpha-THP/allopregnanolone) and 3alpha,21-dihydroxy-5alpha- pregnane-20-one (3alpha,5alpha-THDOC) neuroactive steroids known to alter neural excitability via allosteric activation of gamma- aminobutyric acid type A receptors (GABAAR) (PubMed:11995921, PubMed:12416991, PubMed:12604236). Regulates ligand availability for steroid hormone receptors. Catalyzes the inactivation of 5alpha-DHT and progesterone converting them into 3alpha/beta-androstanediols and (20S)-hydroxypregn-4-en-3-one, respectively (PubMed:10998348, PubMed:24434280). Can form 17beta-hydroxysteroids such as testosterone and estradiol albeit with lower efficiency when compared to AKR1C3 (PubMed:10998348). May contribute to the metabolism of adrenal-derived androgens via reduction of 11-keto-5alpha-androstane-3,17-dione (11K- Adione) into 11-ketoandrosterone (11KAST) and of 11- ketodihydrotestosterone (11KDHT) into 11-keto-5alpha-androstane- 3alpha/beta,17beta-diol (11K-A3alphadiol) (PubMed:31926269). May also play a role in prostaglandin (PG) metabolism by reducing PGD2 to 11beta-PGF2 (PubMed:9716498). Also able to metabolize xenobiotics (S)- indan-1-ol and trans-1,2-dihydrobenzene-1,2-diols (PubMed:8573067, PubMed:9716498). In vitro can efficiently catalyze bidirectional conversion between ketosteroids and hydroxysteroids using NADPH/NADP(+) or NADH/NAD(+) as cofactors. In vivo however, the reductase activity prevails since the major reducing cofactor NADPH inhibits NAD(+)- dependent oxidase activity (PubMed:14672942, PubMed:21802064). {ECO:0000269|PubMed:10998348, ECO:0000269|PubMed:11514561, ECO:0000269|PubMed:11995921, ECO:0000269|PubMed:12416991, ECO:0000269|PubMed:12604236, ECO:0000269|PubMed:14672942, ECO:0000269|PubMed:15929998, ECO:0000269|PubMed:17034817, ECO:0000269|PubMed:17442338, ECO:0000269|PubMed:19218247, ECO:0000269|PubMed:21802064, ECO:0000269|PubMed:24434280, ECO:0000269|PubMed:31926269, ECO:0000269|PubMed:8573067, ECO:0000269|PubMed:8920937, ECO:0000269|PubMed:9716498}. This is the function of AKR1C2 (aldo-keto reductase family 1 member C2, ENSG00000151632).