Nitric-oxide synthase (NOS) catalyzes nitric oxide (NO) synthesis via a two-step process: L-arginine (L-Arg) → N-hydroxy-L-arginine → citrulline + NO. In the active site the heme is coordinated by a thiolate ligand, which accepts a H-bond from a nearby tryptophan residue, Trp-188. Mutation of Trp-188 to histidine in murine inducible NOS was shown to retard NO synthesis and allow for transient accumulation of a new intermediate with a Soret maximum at 420 nm during the L-Arg hydroxylation reaction (Tejero, J., Biswas, A., Wang, Z. Q., Page, R. C., Haque, M. M., Hemann, C., Zweier, J. L., Misra, S., and Stuehr, D. J. (2008) J. Biol. Chem. 283, 33498-33507). However, crystallographic data showed that the mutation did not perturb the overall structure of the enzyme. To understand how the proximal mutation affects the oxygen chemistry, we carried out biophysical studies of the W188H mutant. Our stopped-flow data showed that the 420-nm intermediate was not only populated during the L-Arg reaction but also during the N-hydroxy-L-arginine reaction. Spectroscopic data and structural analysis demonstrated that the 420-nm intermediate is a hydroxide-bound ferric heme species that is stabilized by an out-of-plane distortion of the heme macrocycle and a cation radical centered on the tetrahydrobiopterin cofactor. The current data add important new insights into the previously proposed catalytic mechanism of NOS (Li, D., Kabir, M., Stuehr, D. J., Rousseau, D. L., and Yeh, S. R. (2007) J. Am. Chem. Soc. 129, 6943-6951).