An improved method of cell fractionation allowed the extraction of soluble (sNR) and membrane-associated (mNR) forms of nitrate reductase (NR) from a dinoflagellate, even though in previous studies only mNR had been found in these algae. Both activities were assayed in cell-free extracts of Peridinium gatunense from Lake Kinneret, Israel, after disruption of the cells and differential centrifugation. In the cultures used, sNR showed much higher NO3−-reducing activity. Only a low proportion, 2.5–3% of NR activity, was found to be associated with mNR. Moreover, mNR comprised two forms as indicated by protein solubilization: a tightly membrane-bound and a more weakly attached NR. Ascorbate inhibited all NR activities, but that of mNR recovered after its removal. Polyvinyl pyrrolidone (PVP) and DTT also diminished sNR and mNR activities. For both enzymes, pH optima (7.65) and temperature optima (13–25°C) were similar, and agreed with those for optimum growth of P. gatunense both in culture and in the lake. The most efficient electron donor was NADH, though NADPH sustained low NR activities. Carboxylic anions such as succinate and malate did not support any reduction of NO3−, nor did they cause any stimulation of sNR or mNR activities. Both forms of NR showed a high affinity for their substrates: Km was c. 10 μM for NO3− and c. 5 μM for NADH. The high efficiency of NO3− assimilation by Peridinium seems to be limited mainly by energy under otherwise optimal nutritional conditions and, at low nitrate concentrations, the low Km may be one of the main reasons for the high competitivity of this alga in Lake Kinneret.