Yeast flavohemoglobin, YHb, encoded by the nuclear gene, YHB1, has been implicated in both the oxidative and nitrosidative stress responses in Saccharomyces cerevisiae. Previous studies have shown that expression of YHB1 is optimal in normoxic or hyperoxic conditions yet respiring yeast cells have low levels of reduced YHb pigment, detected by carbon monoxide (CO) photolysis difference spectroscopy of glucose-reduced cells. Here, we have addressed this apparent discrepancy by determining the intracellular location of the YHb protein and analyzing the relationships among respiration, YHb level, and intracellular location. We have found that although intact respiration-proficient cells lack a YHb CO-spectral signature, cell extracts from these cells have both a YHb CO-spectral signature and nitric oxide (NO) consuming activity. This suggests either that YHb can not be reduced in vivo or that YHb heme is maintained in an oxidized state in respiring cells. By using an anti-YHb antibody, CO-difference spectroscopy, and by measuring NO consumption we have found that YHb localizes to two distinct intracellular compartments, the mitochondrial matrix and the cytosol, in respiring cells. Moreover, we have found that the distribution of YHb between these two compartments is affected by the presence or absence of oxygen and by the mitochondrial genome. These findings suggest that YHb functions in oxidative stress indirectly by consuming NO, which inhibits mitochondrial respiration and leads to enhanced production of reactive oxygen species, and that cells can regulate intracellular distribution of YHb in accordance with this function.