The nicotinamide nucleotide transhydrogenase of Escherichia coli has been purified from cytoplasmic membranes by pre-extraction of the membranes with sodium cholate and Triton X-100, solubilization of the enzyme with sodium deoxycholate in the presence of 1 M potassium chloride, and centrifugation through a 1.1 M sucrose solution. The purified enzyme consists of two subunits, alpha and beta, of apparent Mr 50000 and 47000. During transhydrogenation between NADPH and 3-acetylpyridine adenine dinucleotide by both the purified enzyme reconstituted into liposomes and the membrane-bound enzyme, a pH gradient is established across the membrane as indicated by the quenching of the fluorescence of 9-aminoacridine. Treatment of transhydrogenase with N,N'-dicyclohexylcarbodiimide results in an inhibition of proton pump activity and transhydrogenation, suggesting that proton translocation and catalytic activities are obligatory linked. NADH protected the enzyme against inhibition by N,N'-dicyclohexylcarbodiimide, while NADP, and to a lesser extent NADPH, appeared to increase the rate of inhibition. [14C]Dicyclohexylcarbodiimide preferentially labelled the 50000-Mr subunit of the transhydrogenase enzyme. The presence of an allosteric binding site which reacts with NADH, but not with reduced 3-acetylpyridine adenine dinucleotide, has been demonstrated.