The oxidation-reduction potentials of the two c-type hemes of Pseudomonas aeruginosa cytochrome c peroxidase (ferrocytochrome c:hydrogen-peroxide oxidoreductase EC 1.11.1.5) have been determined and found to be widely different, about +320 and -330 mV, respectively. The EPR spectrum at temperatures below 77 K reveals only low-spin signals (gz 3.24 and 2.93), whereas optical spectra at room temperature indicate the presence of one high-spin and one low-spin heme in the enzyme. Optical absorption spectra of both resting and half-reduced enzyme at 77 K lack features of a high-spin compound. It is concluded that the heme ligand arrangement changes on cooling from 298 to 77 K with a concomitant change in the spin state. The active form of the peroxidase is the half-reduced enzyme, in which one heme is in the ferrous and the other in the ferric state (low-spin below 77 K with gz 2.84). Reaction of the half-reduced enzyme with hydrogen peroxide forms Compound I with the hemes predominantly in the ferric (gz 3.15) and the ferryl states. Compound I has a half-life of several seconds and is converted into Compound II apparently having a ferric-ferric structure, characterized by an EPR peak at g 3.6 with unusual temperature and relaxation behavior. Rapid-freeze experiments showed that Compound II is formed in a one-electron reduction of Compound I. The rates of formation of both compounds are consistent with the notion that they are involved in the catalytic cycle.