Mounting evidence indicates the presence of a near complete biological nitrogen cycle in redox-stratified oceans during the late Archean to early Proterozoic (c.2.5-2.0Ga). It has been suggested that the iron (Fe)- or vanadium (V)-dependent nitrogenase rather than molybdenum (Mo)-dependent form was responsible for dinitrogen fixation during this time because oceans were depleted in Mo and rich in Fe. We evaluated this hypothesis by examining the phylogenetic relationships of proteins that are required for the biosynthesis of the active site cofactor of Mo-nitrogenase in relation to structural proteins required for Fe-, V- and Mo-nitrogenase. The results are highly suggestive that among extant nitrogen-fixing organisms for which genomic information exists, Mo-nitrogenase is unlikely to have been associated with the Last Universal Common Ancestor. Rather, the origin of Mo-nitrogenase can be traced to an ancestor of the anaerobic and hydrogenotrophic methanogens with acquisition in the bacterial domain via lateral gene transfer involving an anaerobic member of the Firmicutes. A comparison of substitution rates estimated for proteins required for the biosynthesis of the nitrogenase active site cofactor and for a set of paralogous proteins required for the biosynthesis of bacteriochlorophyll suggests that Nif emerged from a nitrogenase-like ancestor approximately 1.5-2.2Ga. An origin and ensuing proliferation of Mo-nitrogenase under anoxic conditions would likely have occurred in an environment where anaerobic methanogens and Firmicutes coexisted and where Mo was at least episodically available, such as in a redox-stratified Proterozoic ocean basin.