An enzyme was recently described, benzoyl-CoA reductase (dearomatizing), which catalyses the ATP-driven reduction of the aromatic ring of benzoyl-CoA yielding a non-aromatic CoA thioester, ADP and phosphate [Boll, M. & Fuchs, G. (1995) Eur. J. Biochem. 234, 921-933]. The 170-kDa enzyme consists of four different subunits and contains approximately 12 Fe and acid-labile sulfur/mol. Benzoyl-CoA reductase exhibits ATPase activity in the absence of substrate. It is shown that only the reduced form of this iron-sulfur protein has ATPase activity. ATPase activity is reversibly lost when the enzyme is oxidized by thionine; reduction of the enzyme fully restores ATPase and ring-reduction activity. 2 mol ATP are hydrolyzed/2 mol electrons transferred in the course of the reaction. The product ADP acts as competitive inhibitor (Ki = 1.1 mM) for ATP in benzoyl-CoA reduction; ADP inhibits ATPase activity to the same extent as ring-reduction activity. EPR investigation of the dithionite-reduced enzyme suggested the presence of two separate [2Fe-2S] clusters and two interacting [4Fe-4S] clusters. Addition of MgATP to the reduced enzyme resulted in a new isotropic signal at g = 5.15 and a weak signal at g = 12; in controls with MgADP only a minor signal at g = 5.15 was observed. The positions, shapes and temperature dependencies of these MgATP-induced signals are indicative for excited states of a S = 7/2 spin multiplet. The [2Fe-2S] signals were not affected by ATP, but one of the [4Fe-4S] clusters became slowly oxidized. Addition of both benzoyl-CoA and MgATP resulted in a major oxidation of the iron-sulfur clusters accompanied by the appearance of some minor signals of unknown origin in the g = 2.037-1.96 region. Neither the benzoyl-CoA plus MgATP-oxidized nor the thionine-oxidized enzyme showed the ATP-dependent formation of the high-spin signals of the reduced enzyme. At present we hypothesize that the S = 7/2 signal is due to an ATP-induced change of one of the [4Fe-4S] clusters. The data suggest that hydrolysis of MgATP is required to activate the enzyme; in the absence of substrate the energy involved in this activation dissipates. MgATP-driven formation of this excited state of the reduced enzyme rather than transfer of electrons from the reduced enzyme to the aromatic substrate appears to be the rate-limiting step in the catalytic cycle. We suggest that the excited state is required to overcome the high activation energy associated with the loss of the aromatic character and/or to render ring reduction irreversible.