Human steroid 5α-reductase 2 (SRD5A2) is an integral membrane enzyme in steroid metabolism and catalyzes the reduction of testosterone to dihydrotestosterone. Mutations in the SRD5A2 gene have been linked to 5α-reductase deficiency and prostate cancer. Finasteride and dutasteride, as SRD5A2 inhibitors, are widely used antiandrogen drugs for benign prostate hyperplasia. The molecular mechanisms underlying enzyme catalysis and inhibition for SRD5A2 and other eukaryotic integral membrane steroid reductases remain elusive due to a lack of structural information. Here, we report a crystal structure of human SRD5A2 at 2.8 Å, revealing a unique 7-TM structural topology and an intermediate adduct of finasteride and NADPH as NADP-dihydrofinasteride in a largely enclosed binding cavity inside the transmembrane domain. Structural analysis together with computational and mutagenesis studies reveal the molecular mechanisms of the catalyzed reaction and of finasteride inhibition involving residues E57 and Y91. Molecular dynamics simulation results indicate high conformational dynamics of the cytosolic region that regulate NADPH/NADP exchange. Mapping disease-causing mutations of SRD5A2 to our structure suggests molecular mechanisms for their pathological effects. Our results offer critical structural insights into the function of integral membrane steroid reductases and may facilitate drug development.