1. Cells of Nitrosomonas europaea produced N(2)O during the oxidation of ammonia and hydroxylamine. 2. The end-product of ammonia oxidation, nitrite, was the predominant source of N(2)O in cells. 3. Cells also produced N(2)O, but not N(2) gas, by the reduction of nitrite under anaerobic conditions. 4. Hydroxylamine was oxidized by cell-free extracts to yield nitrite and N(2)O aerobically, but to yield N(2)O and NO anaerobically. 5. Cell extracts reduced nitrite both aerobically and anaerobically to NO and N(2)O with hydroxylamine as an electron donor. 6. The relative amounts of NO and N(2)O produced during hydroxylamine oxidation and/or nitrite reduction are dependent on the type of artificial electron acceptor utilized. 7. Partially purified hydroxylamine oxidase retained nitrite reductase activity but cytochrome oxidase was absent. 8. There is a close association of hydroxylamine oxidase and nitrite reductase activities in purified preparations.