From the spectrophotometric observation of pigments, especially cytochrome P-450, in whole liver slices, and correlative studies using isolated endoplasmic reticulum particles, oxidative reactions occurring in the microsomal fraction are suggested as possible significant contributions to liver cell metabolism. The requirement of this system for TPNH and the synergistic involvement of DPNH could markedly affect the cytosol concentration and subsequent oxidized: reduced ratio of these pyridine nucleotides. The involvement of cytochrome b 5 in the oxidative reaction, the necessity of enzymes transferring reducing equivalents from the reduced pyridine nucleotides to both cytochromes b 5 and P-450 and mercurial inhibition studies demonstrating autonomy of the units catalyzing the microsomal TPNH supported mixed-function oxidation reactions aid, considerably, our understanding of the organization of this important enzymic activity within the endoplasmic reticulum of the liver.