1 Palmitoyl-CoA and other longchain acyl-CoA derivatives were purified by counter current distribution according to Craig or by partition chromatography on Sephadex G-50 columns. The products obtained were of high purity. 2 The particle bound acyl-CoA desaturase from bakers yeast was isolated. This microsomal fraction contained a considerable amount of fatty acid synthetase which was removed from the microsomes by ultrasonic treatment. The enzyme fraction used contained a very active acyl-CoA hydrolase which was characterized by determination of the Michaelis constants for various longchain acyl-CoA derivatives. The Km's were found to be about 10−5 M for C12 to C18 fatty acids. 3 By incubation of the desaturase with equimolar amounts of palmitoyl-CoA and radioactive CoASH it was shown that a reaction mechanism proposed by A. T. James for desaturation of fatty acids in yeast is not valid. There is no indication that transfer of an acyl residue from CoA to the enzyme as a first step occurs in the reaction sequence. The enzyme reaction is not inhibited by SH-blocking reagents. It is concluded that an AC-protein-like component does not participate in the enzymatic desaturation of fatty acids in yeast. 4 The Michaelis constants for the substrates stearoyl-, palmitoyl- and myristoyl-CoA for the desaturation reaction were determined to be about 2.8 × 10−6 M. The inhibition of the desaturase by palmitoleoyl-CoA and oleoyl-CoA was shown to be competitive and the inhibitor constants were 2 × 10−5 and 1 × 10−5 M respectively. 5 The enzyme actively converted decanoyl-CoA to a 9-decenoic acid derivative. The appearance of mostly oleic acid and palmitoleic acid in yeast is explained, therefore, not by the specificity of the desaturase, but by the specificity of the fatty acid synthetase which provides no other substrates for the desaturase than palmitoyl-CoA and stearoyl-CoA.