Wild-type Escherichia coli HPII catalase (heme d containing) has 15% the activity of beef liver enzyme per heme. The rate constant for compound I formation with H2O2 is 1.3 x 10(6) M(-1) s(-1). HPII compound I reacts with H2O2 to form O2 with a rate constant of 1.8 x 10(6) M(-1) s(-1). Forty percent of HPII hemes are in the compound I state during turnover. Compound I is reduced by ethanol and formate at rates of 5 and 13 M(-1) s(-1) (pH 7.0), respectively. Incubation of HPII compound I with ferrocyanide and ascorbate does not form a compound II species. Mutation of His128 to alanine or asparagine gives inactive protoheme proteins. Mutation of Asn201 gives partially active heme d forms. Asn201Ala has 24%, Asn201Asp 10%, and Asn201Gln 0.4% of wild-type activity. Asn201His contains protoheme when isolated and converts this via protoheme compound I to a heme d species. Both distal heme cavity residues His128 and Asn201 are implicated in catalytic activity, compound I formation, and in situ heme d biosynthesis. HPII Asn201, like the corresponding residue in protoheme catalases, may promote H+ transfer to His128 imidazole, facilitating (i) peroxide anion binding to heme and (ii) stabilization of a transition state for heterolytic cleavage of the O-O bond.