The binding of the substrates sodium laurate and sodium 12-bromolaurate to the heme-containing domain of Bacillus megaterium cytochrome P450 BM3 (CYP102) has been studied by measurement of the relaxation effects of the unpaired electrons of the heme iron on the protons of water and of the bound substrates. Substrate binding leads to a conversion of the heme iron from a low-spin to a high-spin state, as shown by changes in the optical spectrum. The relaxation measurements show that this is accompanied by expulsion of water from the sixth coordination position of the iron, the distance between the iron and the water protons increasing from 2.6 to 5.2 A. Corresponding relaxation measurements on the substrate protons lead to the determination of a number of distances between the iron and protons of the bound substrate and, hence, to information on the position and orientation of the substrate in the binding site. Laurate and 12-bromolaurate are found to bind in a very similar way, in an extended conformation with the carboxylate probably close to Arg47 and the other end of the chain 7.6-7.8 A from the heme iron. It is shown that laurate and pyridine can bind simultaneously to the P450 domain and that the iron-laurate distances in this ternary complex are not significantly different from those in the binary complex. These observations are compared with those on the substrate complex of cytochrome P450 cam, and their implications for structural changes involved in the catalytic cycle are discussed.