Several P450 enzymes localized in the endoplasmic reticulum and thought to be involved primarily in xenobiotic metabolism, including mouse and rat CYP1A1 and mouse CYP1A2, have also been found to translocate to mitochondria. We report here that the environmental toxin 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD) induces enzymatically active CYP1A4/1A5, the avian orthologs of mammalian CYP1A1/1A2, in chick embryo liver mitochondria as well as in microsomes. P450 proteins and activity levels (CYP1A4-dependent 7-ethoxyresorufin-O-deethylase and CYP1A5-dependent arachidonic acid epoxygenation) in mitochondria were 23-40% of those in microsomes. DHET formation by mitochondria was twice that of microsomes and was attributable to a mitochondrial soluble epoxide hydrolase as confirmed by Western blotting with antiEPHX2, conversion by mitochondria of pure 11,12 and 14,15-EET to the corresponding DHETs and inhibition of DHET formation by the soluble epoxide hydrolase inhibitor, 12(-3-adamantan-1-yl-ureido)-dodecanoic acid (AUDA). TCDD also suppressed formation of mitochondrial and microsomal 20-HETE. The findings newly identify mitochondria as a site of P450-dependent arachidonic acid metabolism and as a potential target for TCDD effects. They also demonstrate that mitochondria contain soluble epoxide hydrolase and underscore a role for CYP1A in endobiotic metabolism.