Abstract Nitrogenases are the only known enzymes that reduce molecular nitrogen (N 2 ) to ammonia. Recent findings have demonstrated that nitrogenases also reduce the greenhouse gas carbon dioxide (CO 2 ), suggesting CO 2 to be a competitor of N 2 . Intriguingly, nitrogenase isoforms ( i . e ., molybdenum (Mo), vanadium and iron (Fe) nitrogenase) differ significantly in their ability to reduce CO 2, but the mechanisms underlying these differences remain elusive. Here, we study the competing reduction of CO 2 and N 2 by the two nitrogenases of Rhodobacter capsulatus , the Mo and Fe nitrogenase. Analyzing their full CO 2 reduction product spectrum in vitro , we find the Fe nitrogenase almost three-fold more efficient in CO 2 reduction than the Mo isoform. Furthermore, the in vitro competition experiments reveal the Fe nitrogenase to be profoundly less selective for the reduction of N 2 than the Mo nitrogenase. We observe the same effects in vivo , where adding CO 2 drastically increases the doubling times of diazotrophically grown R. capsulatus strains that rely on the Fe nitrogenase. The Fe nitrogenase-dependent R. capsulatus strains reduce CO 2 to methane under physiological conditions, highlighting the potential of the Fe nitrogenase for the biotechnological conversion of CO 2 into value-added compounds. Furthermore, both products are secreted into the surrounding, potentially influencing the composition of microbial communities in Mo-deficient environments.