We report the purification and characterization of a soluble cytochrome b5 from coelomic erythrocytes of the sipunculan worm, Phascolopsis gouldii. We also report the isolation and purification of a membrane-bound NADH-cytochrome-b5 reductase from these erythrocytes. The non-heme iron protein, hemerythrin (Hr), is known to be the oxygen carrier in these erythrocytes. The aforementioned purified cytochrome b5 and reductase together catalyze the reduction of P. gouldii [Fe(III),Fe(III)]metHr to [Fe(II),Fe(II)deoxyHr by NADH. EPR spectroscopy demonstrates that a redox process involving formation of the intermediate [Fe(II),Fe(III)]semi-metHr occurs within intact sipunculan erythrocytes as well as in the system of purified components. The rhombic g-tensor of the EPR signal in both cases resembles that of (semi-met)RHr, the form obtained by one-electron reduction of metHr. These observations suggest that cytochrome b5 and NADH-cytochrome-b5 reductase in sipunculan erythrocytes function to counteract autoxidation of oxyHr. The sequence of electron flow in the system of purified components is: NADH----NADH-cytochrome-b5 reductase----cytochrome b5----metHr. At pH 7.5, the reduction of metHr in this system occurs in two phases, only the first of which is dependent on concentration of cytochrome b5. From an analysis of the kinetics and the EPR time-course, we propose that the two phases represent sequential reduction of met- to semi-metHr and reduction of semi-metHr to deoxyHr. This report represents the first demonstration of a physiological system for reduction of metHr.