(1) Proton-pumping nicotinamide nucleotide transhydrogenase from Escherichia coli was purified in a reconstitutively active form employing affinity chromatography on immobilized palmitoyl-Coenzyme A. Reconstituted transhydrogenase showed an active proton pumping and a stimulation of the rate of reduction of 3-acetylpyridine-NAD+ by NADPH by uncouplers. Reconstitution in the absence of a thiol-reducing agent, e.g. dithiothreitol, abolished proton pumping without affecting catalytic activity, giving a decoupled transhydrogenase. (2) Co-reconstitution of transhydrogenase with bacteriorhodopsin gave vesicles which catalyzed a 5-10-fold increased rate of reduction of thio-NADP+ by NADH in the light. The Km for NADH, but not that for thio-NADP+, decreased markedly in the light, indicating an effect of the electrochemical proton potential on the affinity of the enzyme for NADH. Inhibition by substrate derivatives in the absence or presence of light supported this conclusion. Replacement of NADH with 2'-deoxy-NADH gave a strongly sigmoidal concentration dependence, indicating an allosteric change induced by binding to the NAD(H)-site. (3) Reduction of 3-acetylpyridine-NAD+ by NADH in the presence of NADPH, previously demonstrated to be catalyzed by both reconstituted bovine transhydrogenase and detergent-dispersed E. coli transhydrogenase, occurred at a pH below 6.5. This reaction did not pump protons. Proton pumping by 3-acetylpyridine-NAD+ plus NADPH occurred at a pH above 5.5. The two reactions were thus close to mutually exclusive, with a cross point at pH 5.8. Assuming a helix bundle structure of the membrane domain of transhydrogenase, a model is proposed involving histidine 91 of the beta subunit which previously was shown to be essential by site-directed mutagenesis. According to the model the extent of protonation of this histidine determines whether proton pumping or the NADH-3-acetylpyridine-NAD+ reaction takes place.