Oxygen concentration is an environmental signal that regulates nitrogen fixation in the Rhizobium-legume symbiosis. We investigated the effect of the heterologous expression of Vitreoscilla sp. hemoglobin (VHb), which is an oxygen-binding protein, in Rhizobium etli. The vhb gene and its native promoter were subcloned in the plasmid pMR4 and transformed into the R. etli strain CE3. Free-living cultures of engineered R. etli CE3 expressed the vhb gene, as shown by the CO-difference spectral and sodium dodecyl sulfate-polyacrylamide gel electrophoresis (SDS-PAGE) analyses of cell extracts. The expression of vhb in free-living R. etli grown under most limiting oxygen concentrations resulted in an increase in respiratory activity, chemical energy content, and expression of the nitrogen-fixation gene nifHc. Bacteroids isolated from nodules of bean plants inoculated with the engineered R. etli CE3 expressed the vhb gene, as shown by RNA slot-blot analysis. Bean plants inoculated with the engineered strain exhibited higher nitrogenase activity and total nitrogen content (68% and 14 to 53%, respectively) than bean plants inoculated with the R. etli wild type. These results suggest that the synthesis of VHb in engineered R. etli stimulated the respiratory efficiency of free-living rhizobia, and also probably of symbiotic bacteroids, thus leading to higher levels of symbiotic nitrogen fixation.