We report on the spectroscopy and enzymatic activity of horseradish peroxidase (HRP) coupled to Ag nanoparticles. We show that vibrational spectra of single HRP molecules can be detected by measuring surface-enhanced Raman scattering (SERS) from isolated and immobilized protein-nanoparticle aggregates. However, the nanoparticle-protein interaction results in decreased enzymatic activity, as shown by an ensemble-averaged HRP activity assay. We demonstrate that H2O2, one of the enzyme substrates in the assay, reacts with the Ag surface and that it is necessary to pretreat the Ag particles with H2O2 to retain full HRP activity in the Ag sol. However, the concomitant changes in the Ag surface adsorbate layer caused by this treatment prevent strong HRP adsorption and therefore also single-molecule SERS sensitivity. Layers of H2O2-treated Ag particles can instead be used to enhance the fluorescence signal from single functional HRP molecules.