Acetylene (C2H2) is a trace constituent of the present Earth's oxidizing atmosphere, reflecting a mixture of terrestrial and marine emissions from anthropogenic, biomass-burning, and unidentified biogenic sources. Fermentation of acetylene was serendipitously discovered during C2H2 block assays of N2O reductase, and Pelobacter acetylenicus was shown to grow on C2H2 via acetylene hydratase (AH). AH is a W-containing, catabolic, low-redox-potential enzyme that, unlike nitrogenase (N2ase), is specific for acetylene. Acetylene fermentation is a rare metabolic process that is well characterized only in P. acetylenicus DSM3246 and DSM3247 and Pelobacter sp. strain SFB93. To better understand the genetic controls for AH activity, we sequenced the genomes of the three acetylene-fermenting Pelobacter strains. Genome assembly and annotation produced three novel genomes containing gene sequences for AH, with two copies being present in SFB93. In addition, gene sequences for all five compulsory genes for iron-molybdenum N2ase were also present in the three genomes, indicating the cooccurrence of two acetylene transformation pathways. Nitrogen fixation growth assays showed that DSM3426 could ferment acetylene in the absence of ammonium, but no ethylene was produced. However, SFB93 degraded acetylene and, in the absence of ammonium, produced ethylene, indicating an active N2ase. Diazotrophic growth was observed under N2 but not in experimental controls incubated under argon. SFB93 exhibits acetylene fermentation and nitrogen fixation, the only known biochemical mechanisms for acetylene transformation. Our results indicate complex interactions between N2ase and AH and suggest novel evolutionary pathways for these relic enzymes from early Earth to modern days.