1. Cell-free extracts prepared from soya-bean nodule bacteroids produced HD from D(2) in the presence of dithionite, an ATP-generating system and nitrogen. 2. Crude extracts of bacteroids or of Azotobacter vinelandii showed some background D(2) exchange when any one of these was omitted. 3. Partial purification of bacteroid extracts diminished this background activity and gave increased D(2) exchange and nitrogen fixation. 4. Although increasing pN(2) stimulated both reactions, the apparent K(m) (N(2)) for nitrogen fixation was much higher than the apparent K(m) (N(2)) for D(2) exchange when partially purified bacteroid extracts were used. 5. Carbon monoxide was a competitive inhibitor of nitrogen fixation by partially purified bacteroid extracts, but D(2) exchange was inhibited in a non-competitive fashion. 6. These results are discussed in relation to the possible existence of enzyme-bound intermediates of nitrogen fixation.