Neutrophils and other phagocytic cells support host defense by ingesting microbes and destroying them with reactive oxygen species or oxygen independent mechanisms. Production of ROS is initiated by the phagocyte NADPH oxidase (phox), an enzyme system composed of several constituents. During activation of the cell cytosolic phox proteins (p47phox, p67phox, p40phox, and Rac2) translocate to the plasma membrane and specific granules fuse with the plasma membrane increasing the amount of flavocytochrome b(558). The resultant assembly of phox components results in formation of a complete complex and expression of activity. In this study, we evaluated the oxidase activity of specific granules. In the SDS cell-free system, specific granules expressed oxidase activity in the presence of cytosol in a manner similar to plasma membrane. In contrast to plasma membrane, activity of specific granules was latent, diminishing rapidly over time. In addition, this subcellular fraction contained an inhibitor, possibly related to contamination with azurophilic granules explaining previously published discrepant results. Experiments with recombinant p47phox, p67phox, and dilute cytosol or fractionated cytosol as a source of Rac demonstrated that specific granules have requirements identical to specific granules for oxidase activity. Finally, analysis of neutrophils stimulated with PMA demonstrated translocation of p47phox and to p67phox to specific granules as well as plasma membrane. Both plasma membrane and specific granules from PMA stimulated cells expressed oxidase activity with addition of NADPH demonstrating an assembled oxidase complex. These studies establish a critical role for specific granules as a site for assembly and activation of the oxidase enzyme system and an important constituent for the microbicidal activity of the neutrophil.