Time-resolved absorption spectra of the FAD-containing enzyme mercuric reductase were recorded during the catalytic reaction at 25°C, pH 7.3. With an excess of NADPH over Hg2+ there was a rapid (k= 43 s−1) initial formation of a spectral species similar to that previously assigned to an NADPH complex of two-electron-reduced enzyme, EH2-NADPH. This spectrum persisted during the quasisteady-state phase of the reaction suggesting that EH2-NADPH is a true catalytic intermediate and that the rate of catalysis is limited by the oxidation of EH2-NADPH by Hg2+. Also with an excess of Hg2+ over NADPH a spectrum similar to that of EH2-NADPH was rapidly formed. As the NADPH was exhausted, the spectrum of oxidized enzyme, E, did not reappear but rather a spectrum similar to that previously assigned to an NADP+ complex of two-electron-reduced enzyme, EH2-NADP+. These results suggest that EH2-NADP+ cannot rapidly reduce the Hg2+ substrate. However, eventually all reducing equivalents from NADPH added to oxidized, activated enzyme are utilized for the reduction of Hg2+. A mechanism model is proposed that does not involve the free, oxidized enzyme in the catalytic cycle.