Rat liver and kidney homogenates, fortified with the appropriate cofactors, produced H2O2 when incubated with prostaglandin (PG) E2 or its CoA ester (PGE2-CoA), indicating that PGE2-CoA served as substrate for acyl-CoA oxidase, the first enzyme of peroxisomal beta-oxidation. PGE2-CoA oxidase was stimulated to the same extent as palmitoyl-CoA oxidase by treatment of rats with the peroxisome proliferator clofibrate. Subcellular fractionation confirmed that both oxidase activities were located in peroxisomes. When highly purified peroxisomes were incubated with [1-14C]PGE2, radioactive oxidation products were released, demonstrating that peroxisomes were capable of catalyzing the complete beta-oxidation sequence. However, PGE2 beta-oxidizing activity was expressed only when isolated microsomes were added to the purified peroxisomes, indicating that PGE2-CoA synthetase is located in the endoplasmic reticulum. Cofactor requirements for peroxisomal [1-14C]PGE2 and [1-14C]palmitate oxidation were identical, and oxidation was not inhibited by cyanide. [1-14C]PGE2 was also beta-oxidized by highly purified mitochondrial fractions, devoid of peroxisomes, when microsomes were added. Mitochondrial [1-14C]PGE2 and [1-14C]palmitate oxidation was CoA- and ATP-dependent and inhibited by cyanide. Palmitate oxidation was carnitine-dependent, but PGE2 oxidation was not. Acyl-CoA dehydrogenase activity, but not carnitine acyltransferase activity, was detected with PGE2-CoA as substrate. [1-14C]PGE2 oxidation in whole liver homogenates was only slightly inhibited by cyanide, indicating that peroxisomes oxidized the major portion of PGE2. The concentrations of PGE2 employed in these experiments exceeded the in vivo concentrations by several orders of magnitude. Therefore, we suggest that the urinary PG metabolite excretion be measured in patients with hereditary diseases in which peroxisomal or mitochondrial beta-oxidation is not functioning in order to clarify the role of each organelle in PG oxidation in vivo.