Mutants of an obligate aerobic bacterium, Vitreoscilla, that have deficiency in heat-labile catalase-peroxidase hydroperoxidase I (HPI) were created by EMS treatment. The catalase-peroxidase HPI-deficient mutant showed substantially lower peroxidase activity in exponential and mid-stationary phase compared with the wild type strain. In late stationary phase, the mutant exhibited no peroxidase activity. Peroxidase deficiency in the mutant was revealed by polyacrylamide gels stained for peroxidase activity. Characteristically, catalase levels in the mutant increased about 14- and 8-fold during growth in the exponential and stationary phases, respectively, compared to those in the wild type, suggesting a compensatory effect for protection from $H_2O_2$ toxicity. The mutant showed differences in physiology from the wild type: retardation in growth rate and decrease in oxygen consumption. Both the wild type and the catalase-peroxidase HPI-deficient mutant of Vitreoscilla had lower growth rates in media containing increasing $H_2O_2$ concentrations. However, the mutant exhibited an additionally decreased growth rate after 6 to 8 h of growth compared to the wild type. The wild type was resistent up to 20 mM $H_2O_2$, whereas the mutant was very sensitive to high concentrations of exogenous $H_2O_2$. Although elevated catalase levels would provide protection of the bacteria from the deleterious effect of $H_2O_2$, it did not appear to be complete. Cell-free extracts of the mutant showed decreased NADH oxidation rates and higher accumulation of $H_2O_2$ during this oxidation. These results may account for the impaired growth and earlier onset of death phase by the catalase-peroxidase HPI-deficient mutant of Vitreoscilla.