Kinetic measurements indicate that the energy-independent transhydrogenation of 3-acetylpyridine-NAD+ by NADPH in membranes of Escherichia coli follows a rapid equilibrium random bireactant mechanism. Each substrate, although reacting preferentially with its own binding site, is able to interact with the binding site of the other substrate to cause inhibition of enzyme activity. 5'-AMP (and ADP) and 2'-AMP interact with the NAD+- and NADP+-binding sites, respectively. Phenylglyoxal and 2,3-butanedione in borate buffer inhibit transhydrogenase activity presumably by reacting with arginyl residues. Protection against inhibition by 2,3-butanedione is afforded by NADP+, NAD+, and high concentrations of NADPH and NADH. Low concentrations of NADPH and NADH increase the rate of inhibition by 2,3-butanedione. Similar effects are observed for the inactivation of the transhydrogenase by tryptic digestion in the presence of these coenzymes. It is concluded that there are at least two conformations of the active site of the transhydrogenase which differ in the extent to which arginyl residues are accessible to exogenous agents such as trypsin and 2,3-butanedione. One conformation is induced by low concentrations of NADH and NADPH. Under these conditions the coenzymes could be reacting at the active site or at an allosteric site. The stimulation of transhydrogenase activity by low concentrations of the NADH is consistent with the latter possibility.