The decomposition of steroid and other organic hydroperoxides by the microsomal fractions of rat liver and bovine adrenal cortex has been investigated. The peroxidase activity of microsomal fractions was measured using N,N,N′,N′-tetramethyl- pphenylene diamine (TMPD) as the hydrogen donor and following its rate of oxidation spectrophotometrically at 610 nm. A comparison of the hydroperoxide specificity of microsomal peroxidase revealed that the 17α-hydroperoxide derivatives of progesterone, pregnenolone, and allopregnanolone were very effective substrates. Phenobarbital or 3-methylcholanthrene pretreatment of rats enhanced the peroxidase activity of hepatic microsomes and cytochrome P-450 showed a parallel increase in specific content. Microsomal “P-450 particles” containing cytochrome P-450 as the sole protoheme constituent showed the same peroxidase activity per mole of P-450 as did original microsomes. Further evidence for cytochrome P-450 being a microsomal peroxidase was the inhibition of peroxidase activity by ligands forming type I and type II spectra with P-450 and inhibition by reagents that converted cytochrome P-450 to cytochrome P-420. A mechanism for microsomal peroxidase activity involving higher oxidation states of iron of the P-450 heme is suggested. Incubation of the 17α-hydroperoxide derivatives of progesterone and pregnenolone with microsomal fractions resulted in the formation of the corresponding 17α-hydroxy derivatives as the major products. The conversion of progesterone 17α-hydroperoxide by adrenocortical microsomes to 17α-hydroxyprogesterone was followed spectrally by means of induced difference spectra. Progesterone 17α-hydroperoxide did not give a type I-induced difference spectrum but the product, 17α-hydroxyprogesterone, gave a type I difference spectrum thus permitting direct observation of the conversion of the hydroperoxide to 17α-hydroxyprogesterone. These results are discussed in light of previous suggestions that steroid hydroperoxides may be intermediates in steroid hydroxylations.