According to  labeling experiments carried out in 1997, ammonium is biologically oxidized by hydroxylamine, most likely derived from nitrite, as the probable electron acceptor. The conversion of hydrazine to dinitrogen gas is hypothesized to be the reaction that generates the electron equivalents for the reduction of nitrite to hydroxylamine. In general, two possible reaction mechanisms are addressed: 
* One mechanism hypothesizes that a membrane-bound enzyme complex converts ammonium and hydroxylamine to hydrazine first, followed by the oxidation of hydrazine to dinitrogen gas in the periplasm. At the same time, nitrite is reduced to hydroxylamine at the cytoplasmic site of the same enzyme complex responsible for hydrazine oxidation with an internal electron transport (Figure 3a). 
* The other mechanism postulates the following: ammonium and hydroxylamine are converted to hydrazine by a membrane-bound enzyme complex, hydrazine is oxidized in the periplasm to dinitrogen gas, and the generated electrons are transferred via an electron transport chain to nitrite reducing enzyme in the cytoplasm where nitrite is reduced to hydroxylamine (Figure 3b). 
Whether the reduction of nitrite and the oxidation of hydrazine occur at different sites of the same enzyme or the reactions are catalyzed by different enzyme systems connected via an electron transport chain remains to be investigated. In microbial nitrogen metabolism, the occurrence of hydrazine as an intermediate is rare. Hydrazine has been proposed as an enzyme-bound intermediate in the nitrogenase reaction.
Recently, using detailed molecular analyses and combining complementary methods, Kartal and coworkers published strong evidence supporting the latter mechanism.
Furthermore, the enzyme producing hydrazine, hydrazine synthase was purified and shown to produce hydrazine from NO and ammonium. The production of hydrazine from ammonium and NO was also supported by the resolution of the crystal structure of the enzyme hydrazine sythase.
A possible role of nitric oxide (NO) or nitroxyl (HNO) in anammox was proposed by Hooper et al. by way of condensation of NO or HNO and ammonium on an enzyme related to the ammonium monooxygenase family. The formed hydrazine or imine could subsequently be converted by the enzyme hydroxylamine oxidase to dinitrogen gas, and the reducing equivalents produced in the reaction are required to combine NO or HNO and ammonium or to reduce nitrite to NO. Environmental genomics analysis of the species Candidatus Kuenenia stuttgartiensis, through a slightly different and complementary metabolism mechanism, suggested NO to be the intermediate instead of hydroxylamine (Figure 4). However, this hypothesis also agreed that hydrazine was an important intermediate in the process. In this pathway (Figure 4), there are two enzymes unique to anammox bacteria: hydrazine synthase (hzs) and hydrazine dehydrogenase (hdh). The HZS produces hydrazine from nitric oxide and ammonium, and HDH transfer the electrons from hydrazine to ferredoxin. Few new genes, such as some known fatty acid biosynthesis and S-adenosylmethionine radical enzyme genes, containing domains involved in electron transfer and catalysis have been detected. Anammox microorganisms can also directly couple NO reduction to ammonia oxidation, without the need for nitrite supply.
Another, still unexplored, reaction mechanism involves anaerobic ammonium oxidation on anodes of bio-electrical systems. Such systems can be microbial fuel cells or microbial electrolysis cells. In the absence of dissolved oxygen, nitrite, or nitrate, microbes living in the anode compartment are able to oxidize ammonium to dinitrogen gas (N) just as in the classical anammox process. At the same time, they unload the liberated electrons onto the anode, producing electrical current. This electrical current can be used either directly in fuel cell mode or for hydrogen and methane gas production in electrolysis mode. While there is no clarity on the reaction mechanism behind, one hypothesis is that nitrite, nitrate, or dinitrogen oxide play a role as intermediates. However, since the process occurs at very low electrochemical potentials, other, more speculative, reaction mechanisms seem possible as well.