The tetraheme cytochrome c(554) (cyt c(554)) from Nitrosomonas europaea is believed to function as an electron-transfer protein from hydroxylamine oxidoreductase (HAO). We show here that cyt c(554) also has significant NO reductase activity. The protein contains one high-spin and three low-spin c-type hemes. HAO catalyzed reduction of the cyt c(554), ligand binding, intermolecular electron transfer, and kinetics of NO reduction by cyt c(554) have been investigated. We detect the formation of a NO-bound ferrous heme species in cyt c(554) by EPR and Mössbauer spectroscopies during the HAO catalyzed oxidation of hydroxylamine, indicating that N-oxide intermediates produced from HAO readily bind to cyt c(554). In the half-reduced state of cyt c(554), we detect a spin interaction between the [FeNO](7) state of heme 2 and the low-spin ferric state of heme 4. We find that ferrous cyt c(554) will reduce NO at a rate greater than 16 s(-1), which is comparable to rates of other known NO reductases. Carbon monoxide or nitrite are shown not to bind to the reduced protein, and previous results indicate the reactions with O(2) are slow and that a variety of ligands will not bind in the oxidized state. Thus, the enzymatic site is highly selective for NO. The NO reductase activity of cyt c(554) may be important during ammonia oxidation in N. europaea at low oxygen concentrations to detoxify NO produced by reduction of nitrite or incomplete oxidation of hydroxylamine.