Conversion of NO to stable S-nitrosothiols is perceived as a biologically important strategy of NO storage and a signal transduction mechanism. Transition-metal ions and metalloproteins are competent electron acceptors that may promote the formation of S-nitrosothiols from NO. We selected N-acetylmicroperoxidase (AcMP-11), a model of protein heme centers, to study NO incorporation to three biologically relevant thiols (glutathione, cysteine, and N-acetylcysteine). The efficient formation of S-nitrosothiols under anaerobic conditions was confirmed with spectrofluorimetric and electrochemical assays. AcMP-11-assisted incorporation of NO to thiols occurs via an intermediate characterized as an N-coordinated S-nitrosothiol, (AcMP-11)Fe2+(N(O)SR), which is efficiently converted to (AcMP-11)Fe2+(NO) in the presence of NO excess. Two possible mechanisms of S-nitrosothiol formation at the heme-iron were considered: a nucleophilic attack on (AcMP-11)Fe2+(NO+) by a thiolate and a reaction of (AcMP-11)Fe3+(RS) with NO. Kinetic studies, performed under anaerobic conditions, revealed that the reversible formation of (AcMP-11)Fe2+(N(O)SR) occurs in a reaction of RS- with (AcMP-11)Fe2+(NO+) and excluded the second mechanism, indicating that the formation of (AcMP-11)Fe3+(RS) is a dead-end equilibrium. Theoretical calculations revealed that N-coordination of RSNO to iron, forming (AcMP-11)Fe2+(N(O)SR), shortens the S-N bond and increases the complex stability compared to S-coordination. Our work unravels the molecular mechanism of heme-iron-assisted interconversion of NO and low-molecular-weight thiols to S-nitrosothiols and recognizes the reversible NO binding in the form of a heme-Fe2+(N(O)SR) motif as an important biological strategy of NO storage.