The Old Yellow Enzyme has been shown to catalyze efficiently the NADPH-linked reduction of nitro-olefins. The reduction of the nitro-olefin proceeds in a stepwise fashion, with formation of a nitronate intermediate that is freely dissociable from the enzyme. The first step involves hydride transfer from the enzyme-reduced flavin to carbon 2 of the nitro-olefin. The protonation of the nitronate at carbon 1 to form the final nitroalkane product also is catalyzed by the enzyme and involves Tyr-196 as an active site acid/base. This residue also is involved in aci-nitro tautomerization of nitroalkanes, the first example of a nonredox reaction catalyzed by the enzyme.