A strain of Pseudomonas putida that can express a nitrate reductase that is located in the periplasmic compartment was isolated from freshwater. The enzyme was active in vivo during arginine fermentation and at the onset of oxygen limitation in batch cultures. The activity of the enzyme increased the yield of bacteria following fermentative growth under anoxic conditions with arginine, but nitrate reduction did not support growth on non-fermentable carbon substrates under anoxic conditions. Cells expressing the periplasmic nitrate reductase were capable of reducing nitrate in the presence of oxygen. Nitrate reduction under oxic conditions was clearly coupled to a respiratory electron transport chain because: (1) the process was sensitive to the respiratory inhibitors rote-none and 2-n-heptyl-4-hydroxyquinoline N-oxide, and (2) membrane-bound and periplasmic cytochromes were involved. This is the first report of the presence of a periplasmic nitrate reductase in a member of the gamma proteobacteria.