To understand how heme and (6R)-5,6,7,8-tetrahydro-l-biopterin (H(4)B) participate in nitric-oxide synthesis, we followed ferrous-dioxy heme (Fe(II)O(2)) formation and disappearance, H(4)B radical formation, and Arg hydroxylation during a single catalytic turnover by the inducible nitric-oxide synthase oxygenase domain (iNOSoxy). In all cases, prereduced (ferrous) enzyme was rapidly mixed with an O(2)-containing buffer to start the reaction. A ferrous-dioxy intermediate formed quickly (53 s(-1)) and then decayed with concurrent buildup of ferric iNOSoxy. The buildup of the ferrous-dioxy intermediate preceded both H(4)B radical formation and Arg hydroxylation. However, the rate of ferrous-dioxy decay (12 s(-1)) was equivalent to the rate of H(4)B radical formation (11 s(-1)) and the rate of Arg hydroxylation (9 s(-1)). Practically all bound H(4)B was oxidized to a radical during the reaction and was associated with hydroxylation of 0.6 mol of Arg/mol of heme. In dihydrobiopterin-containing iNOSoxy, ferrous-dioxy decay was much slower and was not associated with Arg hydroxylation. These results establish kinetic and quantitative links among ferrous-dioxy disappearance, H(4)B oxidation, and Arg hydroxylation and suggest a mechanism whereby H(4)B transfers an electron to the ferrous-dioxy intermediate to enable the formation of a heme-based oxidant that rapidly hydroxylates Arg.