The crystal structure of the flavoprotein NADH peroxidase shows that the Arg303 side chain forms a hydrogen bond with the active-site His10 imidazole and is therefore likely to influence the catalytic mechanism. Dithionite titration of an R303M mutant [E(FAD, Cys42-sulfenic acid)] yields a two-electron reduced intermediate (EH(2)) with enhanced flavin fluorescence and almost no charge-transfer absorbance at pH 7.0; the pK(a) for the nascent Cys42-SH is increased by over 3.5 units in comparison with the wild-type EH(2) pK(a) of </=4.5. NADH titration of the mutant peroxidase yields the same EH(2) intermediate, but in contrast to the behavior of wild-type enzyme, this species can be reduced directly to an EH(4).NAD(+) complex. Kinetic analyses demonstrate that the R303M mutant is severely compromised, although active, with k(cat) = 3 s(-)(1) at pH 7.0, 5 degrees C; enzyme-monitored turnover results indicate that the steady-state consists predominantly of an E-FADH(2).NAD(+) species. When the oxidized mutant is reacted anaerobically with 0.9 equiv of NADH/FAD, a clearly biphasic pattern is observed at 450 nm; relatively rapid flavin reduction is followed by reoxidation at 2.6-2.7 s(-)(1) ( approximately k(cat)). Thus replacement of Arg303 with Met leads to an altered peroxidase form in which the rate-limiting step in turnover is the intramolecular transfer of electrons from FADH(2) --> Cys42-SOH. The crystal structure of the R303M peroxidase has been refined at 2.45 A resolution. In addition to eliminating the Arg303 interactions with His10 and Glu14, the mutant exhibits a significant change in the conformation of the Cys42-SOH side chain relative to FAD and His10 in particular. These and other results provide a detailed understanding of Arg303 and its role in the structure and mechanism of this unique flavoprotein peroxidase.