2,3-Dihydroxypropanesulfonate (DHPS) is a major sulfur species in the biosphere. One important route for the production of DHPS is sulfoglycolytic catabolism of sulfoquinovose (SQ) through the Embden-Meyerhof-Parnas (sulfo-EMP) pathway. SQ is a sulfonated carbohydrate present in plant and cyanobacterial sulfolipids (sulfoquinovosyl diacylglyceride and its metabolites) and is biosynthesised globally at a rate of around 10 billion tonnes per annum. The final step in the bacterial sulfo-EMP pathway involves reduction of sulfolactaldehyde (SLA) to DHPS, catalysed by an NADH-dependent SLA reductase. Based on conserved sequence motifs, we assign SLA reductase to the β-hydroxyacid dehydrogenase (β-HAD) family, an example of a β-HAD enzyme that acts on a sulfonic acid substrate, rather than a carboxylic acid. We report crystal structures of the SLA reductase YihU from E. coli K-12 in its apo and cofactor-bound states, as well as a ternary complex YihU•NADH•DHPS with the cofactor and product bound in the active site. Conformational flexibility observed in these structures, combined with kinetic studies, confirm a sequential mechanism and provide evidence for dynamic domain movements that occur during catalysis. The ternary complex structure reveals a conserved sulfonate pocket in SLA reductase that recognises the sulfonate oxygens through hydrogen bonding to Asn174, Ser178, and the backbone amide of Arg123, along with an ordered water molecule. This triad of residues distinguishes these enzymes from classical β-HADs that act on carboxylate substrates. A comparison of YihU crystal structures with close structural homologues within the β-HAD family highlights key differences in the overall domain organization and identifies a peptide sequence that is predictive of SLA reductase activity.