Nitrite is an important metabolite in the physiological pathways of NO and other nitrogen oxides in both enzymatic and nonenzymatic reactions. The ferric heme b protein nitrophorin 4 (NP4) is capable of catalyzing nitrite disproportionation at neutral pH, producing NO. Here we attempt to resolve its disproportionation mechanism. Isothermal titration calorimetry of a gallium(III) derivative of NP4 demonstrates that the heme iron coordinates the first substrate nitrite. Contrary to previous low-temperature EPR measurements, which assigned the NP4-nitrite complex electronic configuration solely to a low-spin (S = 1/2) species, electronic absorption and resonance Raman spectroscopy presented here demonstrate that the NP4-NO₂^– cofactor exists in a high-spin/low-spin equilibrium of 7:3 which is in fast exchange in solution. Spin-state interchange is taken as evidence for dynamic NO₂^– coordination, with the high-spin configuration (S = 5/2) representing the reactive species. Subsequent kinetic measurements reveal that the dismutation reaction proceeds in two discrete steps and identify an {FeNO}⁷ intermediate species. The first reaction step, generating the {FeNO}⁷ intermediate, represents an oxygen atom transfer from the iron bound nitrite to a second nitrite molecule in the protein pocket. In the second step this intermediate reduces a third nitrite substrate yielding two NO molecules. A nearby aspartic acid residue side-chain transiently stores protons required for the reaction, which is crucial for NPs’ function as nitrite dismutase.