Bacteroidal and cytosolic fractions of nodules of pigeon pea plants (inoculated with Rhizobium PP-11) contained a constitutive nitrate reductase which functioned with NADH, succinate of MVH as the reductant. In bacteroids, the enzyme was associated with a particulate fraction. In contrast, MHV-nitrite reductase was located exclusively in the cytosol. In vivo nitrate reduction by sliced nodules was inhibited by dicoumarol but not by rotenone. Acetylene reduction was, however, sensitive to both these inhibitors. Acetylene reduction in nodule slices was rapidly suppressed by nitrate and nitrite but not by ammonium ions. At varying concentrations of acetylene, acetylene reduction was inhibited non-competitively by nitrate. In most of the experiments, decrease in acetylene reduction was closely associated with the production of nitrite. The possible mechanism for the deleterious effect of nitrate on biological nitrogen fixation is discussed.