Oxygen is known to repress denitrification at the transcriptional and metabolic levels. It has been a common notion that nitrous oxide reductase (N2OR) is the most sensitive enzyme among the four N-oxide reductases involved in denitrification, potentially leading to increased N2O production under suboxic or fluctuating oxygen conditions. We present detailed gas kinetics and transcription patterns from batch culture experiments withParacoccus denitrificans, allowingin vivoestimation of e−-flow to O2 and N2O under various O2 regimes. Transcription ofnosZtook place concomitantly with that ofnarGunder suboxic conditions, whereas transcription ofnirSandnorBwas inhibited until O2 levels approached 0 μM in the liquid. Catalytically functional N2OR was synthesized and active in aerobically raised cells transferred to vials with 7 vol% O2 in headspace, but N2O reduction rates were 10 times higher when anaerobic pre-cultures were subjected to the same conditions. Upon oxygen exposure, there was an incomplete and transient inactivation of N2OR that could be ascribed to its lower ability to compete for electrons compared with terminal oxidases. The demonstrated reduction of N2O at high O2 partial pressure and low N2O concentrations by a bacterium not known as a typical aerobic denitrifier may provide one clue to the understanding of why some soils appear to act as sinks rather than sources for atmospheric N2O.