A rhodanese enzyme of less than 20,000 molecular weight has been purified from Escherichia coli. The enzyme is accessible to substrates upon addition of whole cells to standard assay mixtures. This rhodanese has a Stokes radius of 17 A which for a globular protein corresponds to a molecular weight close to 14,000. It undergoes autoxidation to a polymeric form which is probably an inert dimer. Enzyme inactivated by oxidation can be reactivated by millimolar concentrations of cysteine. Steady-state initial velocity measurements indicate that the enzyme catalyzes the transfer of sulfane sulfur by way of a double displacement mechanism with formation of a covalent enzyme-sulfur intermediate. The turnover number for the enzyme-catalyzed reaction, with thiosulfate as donor substrate and cyanide ion as the sulfur acceptor, is 260 s-1. This value corresponds to a catalytic efficiency 60% of that measured for a previously characterized bovine liver enzyme of more than twice the molecular weight. Furthermore, KmCN is 24 mM which is 2 orders of magnitude higher than the value observed previously for the bovine enzyme. Evidence from chemical inactivation studies implicates an essential sulfhydryl group in the enzyme activity. It is proposed that this group is the site of substrate-sulfur binding in the obligatory enzyme-sulfur intermediate. Furthermore, a cationic site important for binding of the donor thiosulfate is tentatively identified from anion inhibition studies. Tests of alternate acceptor substrates indicate that the physiological dithiol, dihydrolipoate, is a more efficient acceptor than cyanide ion for the enzyme-bound sulfur. Of possibly greater physiological significance, it has been found that the enzyme catalyzes the formation of iron-sulfur centers. Other work indicates the E. coli rhodanese is subject to catabolite repression and suggests a physiological role for the enzyme in aerobic energy metabolism.