The LM2 fraction of cytochrome P-450 from phenobarbital induced rabbit liver microsomes in the presence and in the absence of substrate (benzphetamine) is shown to be a thermal equilibrium of a high spin (S = 5/2) and a low spin (S = 1/2) state each of which exhibiting its individual optical basic spectrum with the Soret maxima at 387 nm and 417 nm for the high spin form and the low spin form, respectively. The equilibrium constants and thermodynamic parameters describing the spin transition and the substrate binding have been evaluated from the temperature and substrate difference spectra. These two interacting equilibria are presented in terms of a thermodynamic model, which provides a quantitative description of the relationship between the substrate binding and the spin equilibrium. From kinetic experiments it is concluded that the spin equilibrium is an electronic one and is not caused by iron ligand dissociation.