Complete saturation of the geranylgeranyl groups of biosynthetic intermediates of archaeal membrane lipids is an important reaction that confers chemical stability on the lipids of archaea, which generally inhabit extreme conditions. An enzyme encoded by the AF0464 gene of a hyperthermophilic archaeon, Archaeoglobus fulgidus, which is a distant homologue of plant geranylgeranyl reductases and an A. fulgidus menaquinone‐specific prenyl reductase[Hemmi H, Yoshihiro T, Shibuya K, Nakayama T, & Nishino T (2005) J Bacteriol187, 1937–1944], was recombinantly expressed and purified, and its geranylgeranyl reductase activity was examined. The radio HPLC analysis indicated that the flavoenzyme, which binds FAD noncovalently, showed activity towards lipid‐biosynthetic intermediates containing one or two geranylgeranyl groups under anaerobic conditions. It showed a preference for 2,3‐di‐O‐geranylgeranylglyceryl phosphate over 3‐O‐geranylgeranylglyceryl phosphate and geranylgeranyl diphosphate in vitro, and did not reduce the prenyl group of respiratory quinones in Escherichia coli cells. The substrate specificity strongly suggests that the enzyme is involved in the biosynthesis of archaeal membrane lipids. GC‐MS analysis of the reaction product from 2,3‐di‐O‐geranylgeranylglyceryl phosphate proved that the substrate was converted to archaetidic acid (2,3‐di‐O‐phytanylglyceryl phosphate). The archaeal enzyme required sodium dithionite as the electron donor for activity in vitro, similarly to the menaquinone‐specific prenyl reductase from the same anaerobic archaeon. On the other hand, in the presence of NADPH (the preferred electron donor for plant homologues), the enzyme reaction did not proceed.