The substitutional photolysis of K4[Mo(CN)8].2H2O in 98% N2H4.H2O has been investigated in detail. A molybdenum(II) intermediate, K5[Mo(CN)7].N2H4, is isolated in the primary stage of the reaction that involves the oxidation of N2H4 to N2, as evidenced by the analysis of evolving gases. The powder X-ray crystal structure of K5[Mo(CN)7].N2H4 indicates the pentagonal bipiramidal geometry of the anion and the presence of N2H4 in proximity to the CN(-) ligands. The salt is characterized by means of EDS, IR, UV-vis, and EPR spectroscopy as well as cyclic voltammetry measurements. The secondary stages of photolysis, involving the catalytic decomposition of N2H4 into NH3 and N2, lead to the formation of a molybdenum(IV) complex, [Mo(CN)4O(NH3)]2-. The monitoring of the amounts of evolving gases combined with UV-vis and EPR spectroscopic measurements at various stages of photolysis indicate that the molybdenum(III,IV) couple is catalytically active. The scheme of the catalytic decomposition of hydrazine is presented and discussed.