The microsomal fraction of sheep vesicular glands has been found to oxygenate 1,3-diphenylisobenzofuran, luminol, and the carcinogenic hydrocarbon benzopyrene when incubated with arachidonic acid. The oxygenations demonstrate an absolute dependence on enzyme and fatty acid and can be completely inhibited by indomethacin and 2,3-dimercaproptopanol, inhibitors of prostaglandin synthetase. The oxygenations can also be stimulated by the hydroperoxy endoperoxide, prostaglandin G2, and 15-hydroperoxy-5,8,11,13-eicosatetraenoic acid. These latter reactions are not inhibited by indomethacin or dimercaptopropanol but do require the microsomal enzyme system. The involvement of superoxide anion in the transformations could not be demonstrated. The oxygenations occurring in the presence of arachidonic acid appear to arise via the interaction of a microsomal enzyme system with hydroperoxide intermediates of prostaglandin biosynthesis. The ability of various sulfur reagents (reduced glutathione, alpha-lipoic acid, methional) to inhibit co-oxygenation is probably related to their ability to stimulate the conversion of the intermediate to prostaglandins.