1. Purified and reconstituted nicotinamide nucleotide transhydrogenase from beef heart mitochondria was investigated with respect to kinetic and regulatory properties in uncoupled and coupled liposomes. 2. Double reciprocal plots of initial velocities for the reduction of NAD+ by NADPH versus substrate concentrations were convergent and intersecting on or close to the abscissa, indicating a ternary complex mechanism. The effect of site-specific inhibitors indicates that the order of addition of the substrates to the enzyme is random. 3. Reconstituted transhydrogenase uncoupled by FCCP reveals kinetic properties that are indicative of energization, i.e. an increased and decreased affinity for NADP+ and NAD+, respectively, suggesting that reconstituted transhydrogenase is maintained in an activated conformation. An increased extent of coupling causes a progressively increasing change in the same direction. These results suggest that the uncoupler-dependent enhancement of the rate of reduction of NAD+ by NADPH is due to a decreased Km for NAD+. 4. Reconstituted transhydrogenase catalyzes a transhydrogenation between NADH and 3-acetylpyridine adenine dinucleotide (oxidized) in the presence of NADPH. Reconstituted transhydrogenase also also catalyzes the reduction of thio-NADP+ by NADPH in the presence of NADH. Both reactions are concluded to occur indirectly through the generation of NADP+ and NAD+, respectively, and not directly through a reduced enzyme intermediate. 5. A proton pump mechanism is proposed for transhydrogenase which involves a dimeric form of the enzyme where the two subunits are alternating in proton pumping.