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Nitrogen-fixing bacteria catalyze the reduction of dinitrogen (N2) to two ammonia molecules (NH3), the major contribution of fixed nitrogen to the biogeochemical nitrogen cycle. The most widely studied nitrogenase is the molybdenum (Mo)-dependent enzyme. The reduction of N2 by this enzyme involves the transient interaction of two component proteins, designated the iron (Fe) protein and the MoFe protein, and minimally requires 16 magnesium ATP (MgATP), eight protons, and eight electrons. The current state of knowledge on how these proteins and small molecules together effect the reduction of N2 to ammonia is reviewed. Included is a summary of the roles of the Fe protein and MgATP hydrolysis, information on the roles of the two metal clusters contained in the MoFe protein in catalysis, insights gained from recent success in trapping substrates and inhibitors at the active-site metal cluster FeMo cofactor, and finally, considerations of the mechanism of N2 reduction catalyzed by nitrogenase. [ABSTRACT FROM AUTHOR]