Alkene monooxygenase from Xanthobacter strain Py2 is an inducible enzyme that catalyzes the O2- and NADH-dependent epoxidation of short chain (C2 to C6) alkenes to their corresponding epoxides as the initial step in the utilization of aliphatic alkenes as carbon and energy sources. In the present study, alkene monooxygenase has been resolved from the soluble fraction of cell-free extracts into four components, each of which has been purified to homogeneity, that are obligately required for alkene epoxidation activity. The four required components are 1) a monomeric 35.5-kDa protein containing 1 mol of FAD and a probable 2Fe-2S center; 2) a 13.3-kDa ferredoxin containing a Rieske-type 2Fe-2S cluster; 3) an 11-kDa monomeric protein that contains no detectable cofactors; and 4) a 212-kDa alpha2beta2gamma2 multimeric protein containing four atoms of nonheme iron. The 35.5-kDa protein has been characterized as an NADH reductase. The physiological electron acceptor for the reductase was the Rieske-type ferredoxin, which is proposed to be an intermediate electron carrier between the reductase and terminal catalytic component of the system. The 212-kDa protein was specifically inactivated in cell-free extracts by the mechanism-based inactivator propyne, suggesting that it is the catalytic component and contains the active site(s) for O2 activation and alkene epoxidation. The subunit structure and metal analysis of this component suggest that it contains two diiron centers, one for each alphabetagamma protomeric unit. No specific enzymatic activities could be assigned for the 11-kDa protein, but this component was obligately required for steady-state alkene epoxidation. The alkene monooxygenase components were expressed during growth of Xanthobacter Py2 on aliphatic alkenes or epoxides and repressed during growth on other carbon sources. The electron transfer components of alkene monooxygenase were highly specific: other reductase activities present in Xanthobacter were incapable of transferring electrons to the Rieske-type ferredoxin or substituting for the reductase in the alkene monooxygenase complex. Likewise, other bacterial and plant ferredoxins were unable to substitute for the Rieske-type ferredoxin in mediating electron transfer to the oxygenase. The biochemical properties of alkene monooxygenase described in this study suggest that this enzyme combines elements of both the well-characterized aromatic dioxygenase (two-component electron transfer scheme) and methane monooxygenase (small regulatory protein and diiron oxygenase) multicomponent enzyme systems.