Microsomes from rat liver form hydrogen peroxide in the presence of an NADPH-generating system in proportion to protein concentrations as determined by three independent methods : ferrithiocyanate, cytochrome c peroxidase, and scopoletin fluorescence. Maximal rates observed were about 15 pmol H,O,/g microsomal protein per minute. The oxygen concentration for half-maximal rates was 50 pM. It is suggested that NADPH-dependent hydrogen peroxide formation in microsomes is mainly due to NADPH oxidase; however, partial inhibition by carbon monoxide suggests that about one third arises from the autoxidation of cytochrome P-450.Similarities exist between microsomal acetaldehyde production from ethanol (i.e. the microsomal ethanol-oxidizing system of Lieber and DeCarli [4]) and hydrogen peroxide formation : viz. requirement for NADPH and oxygen, identical oxygen concentrations for halfmaximal rates, and sensitivity to carbon monoxide. Microsomal acetaldehyde production in the presence of either an NADPH-or an H,O,-generating system exhibits identical characteristics as follows: (a) ethanol concentration for half-maximal rates (i.e. 12 mM); (b) dependency of maximal rates on rates of hydrogen peroxide formation; (c) competitive inhibition by peroxidatic substrates for catalase, e.g. formate (half-maximal effect: 150 mM); (d) inhibition by catalase inhibitors, e.g. azide (half-maximal effect : 50 pM), with identical azide insensitive rates ; (e) diminished acetaldehyde production in microsomes from rats pretreated with aminotriazole or pyrazole with identical residual rates. Moreover, NADPH-dependent acetaldehyde production is suppressed in the presence of an active H,O,-utilizing system. Thus, it is concluded that the NADPH-dependent microsomal ethanol-oxidizing system of Lieber and DeCarli [4] is due to a hydrogen peroxide formation from NADPH and a subsequent peroxidation of ethanol by contaminating catalase. The data indicate that the existence of a unique system in addition to the peroxidatic reaction of catalase as postulated recently [4] is highly doubtful.