We describe the use of the recombinant, nucleotide-binding domains (domains I and III) of transhydrogenase to study structural, functional and dynamic features of the protein that are important in hydride transfer and proton translocation. Experiments on the transient state kinetics of the reaction show that hydride transfer takes place extremely rapidly in the recombinant domain I:III complex, even in the absence of the membrane-spanning domain II. We develop the view that proton translocation through domain II is coupled to changes in the binding characteristics of NADP+ and NADPH in domain III. A mobile loop region which emanates from the surface of domain I, and which interacts with NAD+ and NADH during nucleotide binding has been studied by NMR spectroscopy and site-directed mutagenesis. An important role for the loop region in the process of hydride transfer is revealed.