A microsomal, mixed function oxidase that successively N-demethylates substituted 3-(phenyl)-1,1-dimethylurea substrates was isolated from etiolated cotton seedling hypocotyl extracts by differential and density gradient centrifugation. Active enzyme preparations were also isolated from leaves of cotton, plantain, buckwheat, wild buckwheat and broadbeans. The enzyme is located in the microsomal fraction of plant extracts and requires molecular oxygen and either NADPH or NADH as cofactors. The formation of 1 mole of formaldehyde for each mole of substrate demethylated was demonstrated with 14C methyl-labeled substrate. The enzyme appears to be specific for substituted 3-(phenyl)-1-methylurea compounds, and the apparent K m values for three of these substrates were determined. Inhibition of the enzyme by carbon monoxide, ionic detergents, sulfhydryl reagents, chelating agents and electron acceptors, together with the demonstrated presence of a b 5 cytochrome and an active NADPH-cytochrome c reductase, are discussed as indirect evidence for a microsomal electron transport system in plants similar to those reported for animals. Several differences between the cotton N-demethylase and similar animal systems were also noted. These differences included a greater instability and a decreased sensitivity toward the insecticidal synergists 2,2-diethylaminoethyl-2,2-diphenylpentanoate (SKF 525-A) and 2-(3,4-methylenedioxyphenoxy)-3,6,9-trioxoundecane (Sesamex). The inhibition of N-demethylase activity by several N-methylcarbamates was investigated and the apparent K i value for the competitive inhibition by 1-naphthylmethylcarbamate was determined.