"Hyd-1", produced by Escherichia coli , exemplifies a special class of [NiFe]-hydrogenase that can sustain high catalytic H(2) oxidation activity in the presence of O(2)-an intruder that normally incapacitates the sulfur- and electron-rich active site. The mechanism of "O(2) tolerance" involves a critical role for the Fe-S clusters of the electron relay, which is to ensure the availability-for immediate transfer back to the active site-of all of the electrons required to reduce an attacking O(2) molecule completely to harmless H(2)O. The unique [4Fe-3S] cluster proximal to the active site is crucial because it can rapidly transfer two of the electrons needed. Here we investigate and establish the equally crucial role of the high potential medial [3Fe-4S] cluster, located >20 Å from the active site. A variant, P242C, in which the medial [3Fe-4S] cluster is replaced by a [4Fe-4S] cluster, is unable to sustain steady-state H(2) oxidation activity in 1% O(2). The [3Fe-4S] cluster is essential only for the first stage of complete O(2) reduction, ensuring the supply of all three electrons needed to form the oxidized inactive state "Ni-B" or "Ready" (Ni(III)-OH). Potentiometric titrations show that Ni-B is easily reduced (E(m) ≈ +0.1 V at pH 6.0); this final stage of the O(2)-tolerance mechanism regenerates active enzyme, effectively completing a competitive four-electron oxidase cycle and is fast regardless of alterations at the proximal or medial clusters. As a consequence of all these factors, the enzyme's response to O(2), viewed by its electrocatalytic activity in protein film electrochemistry (PFE) experiments, is merely to exhibit attenuated steady-state H(2) oxidation activity; thus, O(2) behaves like a reversible inhibitor rather than an agent that effectively causes irreversible inactivation. The data consolidate a rich picture of the versatile role of Fe-S clusters in electron relays and suggest that Hyd-1 can function as a proficient hydrogen oxidase.