Catalase-peroxidases (KatGs), responsible for the activation of the anti-tubercular prodrug isoniazid (INH), are unusual members of the class I plant peroxidase family that possess strong catalase activity as well as peroxidase activity. Due to their strong catalase activity and their ability to activate INH, KatGs have been the subject of intense study for many years, and thus the goal of this work is to further characterize this enzyme in the hope of gaining a better understanding into these unusual reactions. Recent successful crystallization of a few representative KatGs revealed a unique covalent Met-Tyr-Trp cross-link joined to the conserved tryptophan in the heme active site, along with a nearby arginine that is in ionic association with the cross-linked tyrosine. Using the KatG from Burkholderia pseudomallei (BpKatG) as a model, site-directed mutagenesis to these residues revealed that they were essential for catalase, but not peroxidase activity. Structural and kinetic analysis revealed that Arg426 acts as a molecular switch, moving between 2 conformations, favoring heme oxidation when not in association with Tyr238 and favoring heme reduction when in association with Tyr238 by imparting its influence on the heme through the cross-link. Analysis of the reaction with peroxyacetic acid using stopped-flow spectrophotometry revealed an initial, rapidly formed enzyme-substrate complex before the formation of the oxoferryl compound I. Kinetic characterization revealed that formation of both the enzyme-substrate complex and the oxoferryl species were dependent on peroxyacetic acid concentration implying that 2 molecules of peroxyacetic acid are required to form the oxoferryl compound I intermediate. Successful co-crystallization with INH and its co-substrate, NAD+ has revealed their binding sites for the first time in a KatG. The NAD+ binding site is 20 Å from the entrance to the heme cavity, involving interactions primarily with the ADP portion of the molecule. The best defined INH binding site is located in a funnel shaped channel on the opposite side of the protein from the entrance channel that requires the movement of a glutamate residue for binding. The structures suggest that once INH is cleaved to the isonicotinoyl radical it diffuses to the NAD+ binding site to form the final active antimicrobial compound, IN-NAD, in a non-enzymatic reaction enhanced by the enzyme’s ability to bind NAD+.