Two distinct microbial processes, denitrification and anaerobic ammonium oxidation (anammox), are responsible for the release of fixed nitrogen as dinitrogen gas (N(2)) to the atmosphere. Denitrification has been studied for over 100 years and its intermediates and enzymes are well known. Even though anammox is a key biogeochemical process of equal importance, its molecular mechanism is unknown, but it was proposed to proceed through hydrazine (N(2)H(4)). Here we show that N(2)H(4) is produced from the anammox substrates ammonium and nitrite and that nitric oxide (NO) is the direct precursor of N(2)H(4). We resolved the genes and proteins central to anammox metabolism and purified the key enzymes that catalyse N(2)H(4) synthesis and its oxidation to N(2). These results present a new biochemical reaction forging an N-N bond and fill a lacuna in our understanding of the biochemical synthesis of the N(2) in the atmosphere. Furthermore, they reinforce the role of nitric oxide in the evolution of the nitrogen cycle.