NO dioxygenation, i.e., the oxidation of nitric oxide to nitrate by oxygen-bound truncated hemoglobin (trHbN) is studied using reactive molecular dynamics simulations. This reaction is an important step in a sequence of events in the overall NO detoxification reaction involving trHbN. The simulations ( approximately 160 ns in total) reveal that the reaction favors a pathway including (i) NO binding to oxy-trHbN, followed by (ii) rearrangement of peroxynitrite-trHbN to nitrato-trHbN, and finally (iii) nitrate dissociation from nitrato-trHbN. Overall, the reactions occur within tens of picoseconds and the crossing seam of the reactant and product are found to be broad. The more conventional pathway, where the peroxynitrite-trHbN complex undergoes peroxide cleavage to form free NO(2) and oxo-ferryl trHbN, is found to be too slow due to a considerable barrier involved in peroxide bond dissociation. The energetics of this step is consistent with earlier electronic structure calculations and make this pathway less likely. The role of Tyr33 and Gln58 in the NO dioxygenation has been investigated by studying the reaction in mutants of trHbN. The mutation study suggests that residues Tyr33 and Gln58 preorient the reactive ligands through a highly dynamical H-bonding network which facilitates the reaction. In particular, the Y33A mutation leads to a significant retardation in NO dioxygenation, in agreement with experiments which reveal a strong influence of the protein environment on the reaction rate.