Milk xanthine oxidase (XO) has been prepared in a dehydrogenase form (XDH) by purifying the enzyme in the presence of 2.5 mM dithiothreitol. Unlike XO, which reacts rapidly only with oxygen and not with NAD, the XDH form of the enzyme reacts rapidly with NAD. XDH has a turnover number for the NAD-dependent conversion of xanthine to urate of 380 mol/min/mol at pH 7.5, 25 degrees C, with a Km = < or = 1 microM for xanthine and a Km = 7 microM for NAD, but has very little O2-dependent activity. There is evidence that the two forms of the enzyme have different flavin environments: XDH stabilizes the neutral form of the flavin semiquinone and XO does not. Further, XDH binds the artificial flavin 8-mercapto-FAD in its neutral form, shifting the pK of this flavin by 5 pH units, while XO binds 8-mercapto-FAD in its benzoquinoid anionic form. XDH can be converted back to the XO form by the addition of three to four equivalents of the disulfide-forming reagent 4,4'-dithiodipyridine, suggesting that, in the XDH form of the enzyme, disulfide bonds are broken; this may cause a conformational change which creates a binding site for NAD and changes the protein structure near the flavin.