Lysis of spheroplasts made from denitrification-adapted Paracoccus denitrificans released a soluble nitrous oxide reductase which was assayed spectrophotometrically under anaerobic conditions by following the oxidation of methyl or benzyl viologen cation radical upon reduction of N2O to N2. Other classes of reductants so far tested, including dithionite, could not substitute for viologen dyes. Viologen dyes, therefore, afford the first practical assay for this previously elusive enzyme of denitrifying bacteria. The assay is specifically an in vitro assay, because the dyes cannot couple with intracellular nitrous oxide reductase. The enzyme exhibited simple saturation kinetics with respect to both N2O and reduced viologen dye. The Km for N2O was about 5 microM at 22 degrees C and pH 7.1 and the apparent Km for reduced benzyl and methyl viologen was 0.9 and 0.5 microM, respectively. Both dyes afforded the same Vmax value. Oxidized viologen dyes were not inhibiting to 1 mM nor was N2 to 1 atm. In fresh lysates, Vmax was about 1.2 mumol of N2O X min-1 x mg of protein-1 or about twice that for intact cells or spheroplasts utilizing yeast extract or lactate. Enzyme activity was observed to be labile in crude preparations under anaerobic conditions. Nitrous oxide reductase was inhibited by acetylene, CO, azide, and cyanide with Ki values of 28, 3.5, 0.35, and 0.045 microM, respectively. All showed noncompetitive inhibition with respect to N2O.