Hydroxylamine oxidoreductase (HAO) from the autotrophic nitrifying bacterium Nitrosomonas europaea catalyzes the oxidation of NH2OH to NO2-. The enzyme contains eight hemes per subunit which participate in catalysis and electron transport. NO is found to bind to the enzyme and inhibit electron flow to the acceptor protein, cytochrome c554. NO is found to oxidize either partially or fully reduced HAO, but NO will not reduce ferric HAO. Since NO can be reduced but not oxidized to product by HAO, NO is not considered to be a long-lived intermediate in the catalytic mechanism. Substrate oxidation occurs in the presence of bound NO or cyanide, suggesting a second interaction site for substrate with HAO and providing a means for recovery of the NO-inhibited form of the enzyme. Upon addition of NO to oxidized HAO, the integer-spin EPR signal from the active site vanishes, an IR band from NO appears at 1920 cm(-1), and a diamagnetic quadrupole iron doublet appears in Mössbauer spectroscopy with delta = 0.06 mm/s and DeltaEq = 2.1 mm/s. The NO stretching frequency and Mössbauer parameters are characteristic of an [FeNO]6 heme complex. New Mössbauer data on ferric myoglobin-NO are also presented for comparison. The results indicate that NO binds to heme P460 and that the loss of the integer-spin EPR signal is due to the conversion of heme P460 to a diamagnetic S = 0 state and concomitant loss of magnetic interaction with neighboring heme 6. In previous studies where the heme P460-heme 6 interaction was affected by substrate or cyanide binding, a signal attributable to heme 6 was not observable. In contrast, in this work, the NO-induced loss of the signal is accompanied by the appearance of a previously unobserved large g(max) (or HALS) low-spin EPR signal from heme 6.