The nitrogen-fixing efficiency of freshly prepared suspensions of Rhizobium leguminosarum bacteroids from pea root nodules was considerably enhanced by addition of bovine serum albumin. Evidence was found that during preparation of bacteroids the cell membrane is exposed to the uncoupling effect of free fatty acids and to plant phospholipase D activity. Both effects could be counteracted by bovine serum albumin. 2. A technique was developed by which concentrations of free O2 and nitrogenase activity could be measured simultaneously under conditions of steady-state respiration. By means of this system it could be shown that in contrast to previous claims, high ATP/ADP ratios can be achieved in bacteroids even with a high concentration of O2 in the medium. 3. Nitrogen fixation was found to be controlled by the ATP/ADP ratio, the generation of reducing equivalents and the switch-off phenomenon. It was demonstrated that the generation of reducing equivalents for nitrogenase is regulated by the energized state and the integrity of the bacteroid cell membrane. The data indicate that the process of aerobic nitrogen fixation in R. leguminosarum bacteroids resembles that of Azotobacter vinelandii.