Cyanobacteria have tremendous potential to produce clean, renewable fuel in the form of hydrogen gas derived from solar energy and water. Of the two cyanobacterial enzymes capable of evolving hydrogen gas (nitrogenase and the bidirectional hydrogenase), the hox-encoded bidirectional Ni-Fe hydrogenase has a high theoretical potential. The physiological role of this hydrogenase is a highly debated topic and is poorly understood relative to that of the nitrogenase. Here the structure, assembly, and expression of this enzyme, as well as its probable roles in metabolism, are discussed and analyzed to gain perspective on its physiological role. It is concluded that the bidirectional hydrogenase in cyanobacteria primarily functions as a redox regulator for maintaining a proper oxidation/reduction state in the cell. Recommendations for future research to test this hypothesis are discussed.