Isolated rat liver cells catalyze the metabolism of benzo(alpha)pyrene (BP) with the resulting formation of phenols, dihydrodiols, and conjugates. The rate of the primary oxidative step in the process was similar to that catalyzed by isolated rat liver microsomes in the presence of a reduced nicotinamide adenine dinucleotide phosphate-generating system and responded similarly to various inhibitors, including 2-diethylaminoethyl-2,2-diphenylvalerate, metyrapone, alpha-naphthoflavone, and hexobarbital. The level of cytoplasmic, reduced nicotinamide adenine dinucleotide phosphate was not rate limiting in liver cells isolated from either fed or fasted animals. The conjugates and dihydrodiols formed were readily excreted, whereas low concentrations of phenols accumulated intracellularly. The pattern of metabolites of BP was the same in isolated rat liver cells and in the isolated perfused rat liver. 3-Methylcholanthrene treatment of the rats caused a marked increase in cellular BP metabolism as well as in cytochrome P-450 concentration. The induced hemoprotein revealed characteristics similar to those previously established with isolated liver microsomes, i.e., increase in high-spin form, enhanced affinity for BP as revealed by a lower Michaelis constant, and sensitivity to the inhibitory action of alpha-naphthoflavone. After 3-methylcholanthrene treatment, phenols and dehydrodiols constituted a larger percentage of the total metabolites, indicating a more pronounced stimulation of the oxidative than of the conjugative step of BP metabolism by induction, and the dihydrodiols now tended to accumulate intracellularly.