The mechanism of inhibition of cytochrome P-450-dependent mixed function oxidation by ethanol was studied. Ethanol competitively inhibited the binding of hexobarbital to liver microsomes, and increased the low spin signal of cytochrome P-450 in the electron spin resonance spectra. Therefore, ethanol decreased the substrates bound to ferric cytochrome P-450 in the first step of mixed function oxidation. The second step of mixed function oxidation is the reduction of ferric cytochrome P-450-substrate complex by NADPH-cytochrome P-450 reductase. The NADPH-dependent reduction of liver microsomal cytochrome P-450 was biphasic and composed of two first-order reactions. Ethanol decreased the rate constants of the fast and slow phases of microsomal cytochrome P-450 reduction. Thus, it is concluded that the inhibition of drug oxidation by ethanol may be due to the displacement of substrates from cytochrome P-450 and to the inhibition of reduction of cytochrome P-450 by NADPH-cytochrome P-450 reductase.