CAT-2, a cytosolic catalase-peroxidase (CP) from Neurospora crassa, which is induced during asexual spore formation, was heterologously expressed and characterized. CAT-2 had the Met-Tyr-Trp (M-Y-W) adduct required for catalase activity. Its Kfor HOwas micromolar for peroxidase and millimolar for catalase activity. A E = -158 mV reduction potential value was obtained and the Soret band shift suggested a mixture of low and high spin ferric iron. CAT-2 EPR spectrum at 10 K indicated an axial and a rhombic component. With peroxyacetic acid (PAA), formation of Compound I* was observed with EPR. CAT-2 homodimer crystallographic structure contained two Kions; Glu107 residues were displaced to bind them. CAT-2 showed the essential amino acid residues for activity in similar positions to other CPs. CAT-2 Arg426 is oriented towards the M-Y-W adduct, interacting with the deprotonated Tyr238 hydroxyl group. A perhydroxy modification of the indole nitrogen of Trp90 was oriented toward the catalytic His91. In contrast to cytochrome c peroxidase and ascorbate peroxidase, the catalase-peroxidase heme propionates are not exposed to the solvent. Together with other N. crassa enzymes that utilize HOas a substrate, CAT-2 has many tryptophan and proline residues at its surface, probably related to HOselection in water.