NADPH-dependent oxidoreductase which catalyzes the reduction of dicarbonyl compounds. Displays reductase activity in vitro with 3,4-hexanedione, 2,3-heptanedione and 1-phenyl-1,2-propanedione as substrates (PubMed:16685466). May function as a dicarbonyl reductase in the enzymatic inactivation of reactive carbonyls involved in covalent modification of cellular components (PubMed:16685466). Also displays a minor hydroxysteroid dehydrogenase activity toward bile acids such as ursodeoxycholic acid (UDCA) and isoursodeoxycholic acid (isoUDCA), which makes it unlikely to control hormone levels (PubMed:16685466). Doesn't show any activity in vitro with retinoids and sugars as substrates (PubMed:16685466). Attenuates MDM2-mediated p53/TP53 degradation, leading to p53/TP53 stabilization and increased transcription activity, resulting in the accumulation of MDM2 and CDKN1A/p21 (PubMed:20547751). Reduces proliferation, migration and invasion of cancer cells and well as the production of ROS in cancer (PubMed:29106393). kcat is 15.2 min(-1) with 1-phenyl-1,2-propanedione as substrate. kcat is 40.0 min(-1) with 2,3-heptanedione as substrate. kcat is 11.7 min(-1) with 3,4-hexanedione as substrate. Directly interacts with MDM2; this interaction occurs in the nucleus and does not target DHRS2 to degradation. A minor fraction of the protein is translocated from the mitochondria to the nucleus, after cleavage of the targeting signal. Widely expressed, with highest levels in liver and kidney, followed by heart, spleen, skeletal muscle and placenta. In hemopoietic cells, expressed in dendritic cells, but not in monocytes, macrophages, granulocytes, nor in B and T lymphocytes. Up-regulated by IL4 and CSF2 in monocytes/macrophages. Down-regulated by bacterial lipopolysaccharides (LPS) and TNF in monocytice-derived dendritic cells. Up-regulated by MYB. Belongs to the short-chain dehydrogenases/reductases (SDR) family.