Although the oxidative condensation of two thiosulfate anions to tetrathionate constitutes a well documented and significant part of the natural sulfur cycle, little is known about the enzymes catalyzing this reaction. In the purple sulfur bacterium Allochromatium vinosum, the reaction is catalyzed by the periplasmic diheme c-type cytochrome thiosulfate dehydrogenase (TsdA). Here, we report the crystal structure of the "as isolated"form of A. vinosum TsdA to 1.98 Å resolution and those of several redox states of the enzyme to different resolutions. The protein contains two typical class I c-type cytochrome domains wrapped around two hemes axially coordinated by His53/Cys96 and His164/Lys208. These domains are very similar, suggesting a gene duplication event during evolution. A ligand switch from Lys208 to Met209 is observed upon reduction of the enzyme. Cys96 is an essential residue for catalysis, with the specific activity of the enzyme being completely abolished in several TsdA-Cys96 variants. TsdA-K208N, K208G, and M209G variants were catalytically active in thiosulfate oxidation as well as in tetrathionate reduction, pointing to heme 2 as the electron exit point. In this study, we provide spectroscopic and structural evidence that the TsdA reaction cycle involves the transient presence of heme 1 in the high-spin state caused by movement of the Sγ atom of Cys96 out of the iron coordination sphere. Based on the presented data, we draw important conclusions about the enzyme and propose a possible reaction mechanism for TsdA.