Epoxide hydrolase activity is recovered in the high-speed supernatant fraction from the liver of all mammals so far examined, including man. For some as yet unexplained reason, the rat has a very low level of this activity, so that cytosolic epoxide hydrolase is generally studied in mice. This enzyme selectively hydrolyzes trans epoxides, thereby complementing the activity of microsomal epoxide hydrolase, for which cis epoxides are better substrates. Cytosolic epoxide hydrolase has been purified to homogeneity from the livers of mice, rabbits and humans. Certain of the physicochemical and enzymatic properties of the mouse enzyme have been thoroughly characterized. Neither the primary amino acid, cDNA nor gene sequences for this protein are yet known, but such characterization is presently in progress. Unlike microsomal epoxide hydrolase and most other enzymes involved in xenobiotic metabolism, cytosolic epoxide hydrolase is not induced by treatment of rodents with substances such as phenobarbital, 2-acetylaminofluorene, trans-stilbene oxide, or butylated hydroxyanisole. The only xenobiotics presently known to induce cytosolic epoxide hydrolase are substances which also cause peroxisome proliferation, e.g., clofibrate, nafenopin and phthalate esters. These and other observations indicate that this enzyme may actually be localized in peroxisomes in vivo and is recovered in the high-speed supernatant because of fragmentation of these fragile organelles during homogenization, i.e., recovery of this enzyme in the cytosolic fraction is an artefact. The functional significance of cytosolic epoxide hydrolase is still largely unknown. In addition to deactivating xenobiotic epoxides to which the organism is exposed directly or which are produced during xenobiotic metabolism, primarily by the cytochrome P-450 system, this enzyme may be involved in cellular defenses against oxidative stress.