We have recently reported that prostaglandin F2 alpha can be chain-shortened by isolated rat liver peroxisomes. In the present study it is further established by cell fractionation experiments that the enzymes involved in this reaction are localized to peroxisomes. Under the conditions employed, the highest activity was found in the light mitochondrial fraction. Further fractionation of the light mitochondrial fraction by sucrose density gradient centrifugation showed that the prostaglandin oxidation activity comigrated with peroxisomal marker enzymes. Di(2-ethylhexyl)phthalate treatment resulted in a tenfold increased capacity for the conversion of prostaglandin F2 alpha into tetranorprostaglandin F1 alpha. The reaction was not inhibited by KCN. The reaction was further characterized with respect to cofactor requirements. The prostaglandin oxidation was found to be completely dependent on NAD, CoA, ATP, Mg2+ and was stimulated by FAD. Incubation of prostaglandin E2 with peroxisomes resulted in conversion into several products. After alkaline hydrolysis, one of these was identified as tetranorprostaglandin B1.