Molecular dynamics simulations and binding affinity studies have been carried out in order to probe the effect of the charge state of His110 and cofactor NADPH on the binding affinity of the potent inhibitor tolrestat to aldose reductase (ALR2) complexed with either NADPH or NADP(+). Molecular dynamics simulations of ALR2-NADP(+)-tolrestat indicate that the carboxylate group of tolrestat forms a hydrogen bond with Tyr48 and His110 of ALR2 regardless of the charge state of His110. In the case of ALR2-NADPH-tolrestat, the H-bonding pattern is significantly different from that of ALR2-NADP(+)-tolrestat, in that Tyr48 does not H-bond to tolrestat. The binding affinity of tolrestat to ALR2 complexed with either NADPH or NADP(+) is comparable and pH-dependent. Based on the H-bonding interactions seen in computer simulations, it is proposed that the cationic moiety at the active site of ALR2-NADP(+) and ALR2-NADPH that interacts with the carboxylate of tolrestat is NADP(+) and His110, respectively. The residue that gives rise to the pH-dependent binding of tolrestat to ALR2-NADP(+) and ALR2-NADPH has been identified as Tyr48 and His110, respectively.