The NifS and NifU nitrogen fixation-specific gene products are required for the full activation of both the Fe-protein and MoFe-protein of nitrogenase from Azotobacter vinelandii. Because the two nitrogenase component proteins both require the assembly of [Fe-S]-containing clusters for their activation, it has been suggested that NifS and NifU could have complementary functions in the mobilization of sulfur and iron necessary for nitrogenase-specific [Fe-S] cluster assembly. The NifS protein has been shown to have cysteine desulfurase activity and can be used to supply sulfide for the in vitro catalytic formation of [Fe-S] clusters. The NifU protein was previously purified and shown to be a homodimer with a [2Fe-2S] cluster in each subunit. In the present work, primary sequence comparisons, amino acid substitution experiments, and optical and resonance Raman spectroscopic characterization of recombinantly produced NifU and NifU fragments are used to show that NifU has a modular structure. One module is contained in approximately the N-terminal third of NifU and is shown to provide a labile rubredoxin-like ferric-binding site. Cysteine residues Cys35, Cys62, and Cys106 are necessary for binding iron in the rubredoxin-like mode and visible extinction coefficients indicate that up to one ferric ion can be bound per NifU monomer. The second module is contained in approximately the C-terminal half of NifU and provides the [2Fe-2S] cluster-binding site. Cysteine residues Cys137, Cys139, Cys172, and Cys175 provide ligands to the [2Fe-2S] cluster. The cysteines involved in ligating the mononuclear Fe in the rubredoxin-like site and those that provide the [2Fe-2S] cluster ligands are all required for the full physiological function of NifU. The only two other cysteines contained within NifU, Cys272 and Cys275, are not necessary for iron binding at either site, nor are they required for the full physiological function of NifU. The results provide the basis for a model where iron bound in labile rubredoxin-like sites within NifU is used for [Fe-S] cluster formation. The [2Fe-2S] clusters contained within NifU are proposed to have a redox function involving the release of Fe from bacterioferritin and/or the release of Fe or an [Fe-S] cluster precursor from the rubredoxin-like binding site.