Transhydrogenase and diaphorase activity of ferredoxin-NADP reductase are enhanced by plant ferredoxins. This stimulation is specific; ferredoxin cannot be replaced by sulfhydryl compounds such as cysteine or dithiothreitol, the apoprotein of ferredoxin or Fe2+, Fe3+ ions. The effect is particularly obvious with the reductase from the heterokont algaBumilleriopsis filiformis Vischer. Reductase and ferredoxin form a complex in the molar ratio of 1:1, which is sensitive to high ionic strength. Under these conditions the complex is destroyed thus eliminating the enhancement by ferredoxin of both transhydrogenase and diaphorase activities. It is concluded that the effect is due to complex formation. Higher concentrations of NAD (>3 mM) and of NADPH (>0.01 mM) inhibit transhydrogenase activity without any effect on its enhancement by ferredoxin. A specific binding site on the reductase for ferredoxin is assumed for which NAD is a poor competitor. Only in the absence of ferredoxin does NAD seem to activate the reductase by occupying both the ferredoxin site and that of the pyridine nucleotides. Reaction kinetics (as a function of NAD concentration) therefore switch from a sigmoid shape when no ferredoxin is added to the normal hyperbolic shape in its presence. Kinetic studies further suggest a “ping pong” type reaction mechanism for the transhydrogenase and diaphorase reaction. A possible change of the underlying mechanism in the presence of ferredoxin is discussed.