An important question for the functioning of heme proteins is whether different ligands present within the protein moiety can readily exchange with heme-bound ligands. Studying the dynamics of the heme domain of the Escherichia coli sensor protein YddV upon dissociation of NO from the ferric heme by ultrafast spectroscopy, we demonstrate that when the hydrophobic leucine residue in the distal heme pocket is mutated to glycine, in a substantial fraction of the protein water replaces NO as an internal ligand in as fast as ∼4 ps. This process, which is near-barrierless and occurs orders of magnitude faster than the corresponding process in myoglobin, corresponds to a ligand swap of NO with a water molecule present in the heme pocket, as corroborated by molecular dynamics simulations. Our findings provide important new insight into ligand exchange in heme proteins that functionally interact with different external ligands.