The properties of peroxisomal enzyme alkylglycerone-phosphate synthase were studied in highly purified peroxisome fractions of rat liver. The requirements for optimal enzyme activity: pH and composition of the reaction mixture, incubation time, and enzyme concentration were investigated, and kinetic studies performed employing both different long-chain fatty alcohols and acyl dihydroxyacetone phosphates as substrates. Activities of the synthase considerably higher as reported before were found in the peroxisome preparation, with alkylglycerone (alkyldihydroxyacetone) phosphate as the sole product of the exchange reaction. The kinetic studies revealed divergent properties of peroxisomal synthase with respect to the substrates involved. Whereas the substrate concentration versus reaction velocity plot for the fatty alcohols reflects Michaelis-Menten kinetic behavior, it displays a maximum followed by inhibition with regard to the acylglycerone phosphate. The enzyme accepts different acylglycerone phosphates without much specificity but it is most active with 9-cis-octadecenol.