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The difficult chemistry of nitrous oxide (N2O) reduction to gaseous nitrogen (N2) in biology is catalysed by the novel micro4-sulphide-bridged tetranuclear Cuz cluster of the N2O reductases (N2OR). Two spectroscopically distinct forms of this cluster have been identified as CuZ and CuZ*. We have obtained a 1.86 A resolution crystal structure of the pink-purple species of N2OR from Achromobacter cycloclastes (AcN2OR) isolated under aerobic conditions. This structure reveals a previously unobserved ligation with two oxygen atoms from H2O/OH- coordinated to Cu1 and Cu4 of the catalytic centre. We ascribe this structure to be that of the CuZ form of the cluster, since the previously reported structures of two blue species of N2ORs, also isolated aerobically, have characterised the redox inactive CuZ* form, revealing a single water molecule at Cu4. Exposure of the as-isolated AcN2OR to sodium iodide led to reduction of the electron-donating CuA site and the formation of a blue species. Structure determination of this adduct at 1.7 A resolution showed that iodide was bound at the CuZ site bridging the Cu1 and Cu4 ions. This structure represents the first observation of an inhibitor bound to the Cu1-Cu4 edge of the catalytic cluster, providing clear evidence for this being the catalytic edge in N2ORs. These structures, together with the published structural and spectroscopic data, give fresh insight into the mode of substrate binding, reduction and catalysis.