An enzyme present in rat liver microsomes catalyzes the conversion of retinyl methyl ether (RME) to retinol; NADPH is required for activity. The optimum pH for the reaction is 7.4; the KM and Vmax values are 120 microM RME and 14.3 nmol of retinol/mg protein/hr, respectively. As a substrate, the 2,3,6-trimethyl-4-methoxyphenyl analog of RME is as effective as RME. There is, however, no measurable activity for dealkylation of retinyl ethyl ether or retinyl butyl ether. Hepatic enzyme activity for the metabolism of RME is induced by 3-methylcholanthrene but not by phenobarbital or RME itself. The induced activity also requires NADPH as a cofactor. The optimum pH for the induced enzyme is 8.4; the KM and Vmax values are 50 microM RME and 111 nmol of retinol/mg protein/hr, respectively. For this enzyme, RME is a better substrate than the 2,3,6-trimethyl-4-methoxyphenyl analog of RME; retinyl ethyl ether is less effective; and again, there is no measurable activity with retinyl butyl ether as a substrate. Neither constitutive nor induced activity is detectable in microsomes from lung, spleen, stomach, kidney, small intestine, or large intestine. The enzyme activity that cleaves retinoid ethers appears to be similar to other microsomal NADPH-requiring O-dealkylases and different from a reported tetrahydropteridine-requiring dealkylase.