Inhibition of sulfotransferase by 2,6-dichloro-4-nitrophenol (DCNP) has been found to completely abolish the genotoxic potential of N-nitrosodiethanolamine (NDELA) in rat liver as indicated by induction of DNA single strand breaks. The DNA strand breaking potential of N-nitroso-2-hydroxymorpholine (NHMOR), a metabolite of NDELA formed by alcohol dehydrogenase-mediated oxidation, was also almost quantitatively abolished. In contrast to these beta-hydroxylated nitrosamines, the effectiveness of N-nitrosodiethylamine (NDEA) remained unaffected by DCNP with respect to its DNA damaging potential. N-Nitrosoethylethanolamine (NEELA) was the most potent genotoxic agent of this series of nitrosamines and its strand breaking activity was only partially inhibited by DCNP. A new activation mechanism for NDELA is proposed: NDELA is transformed at first by alcohol dehydrogenase into the cyclic hemiacetal NHMOR. This cyclic beta-hydroxynitrosamine appears to be a substrate for sulfotransferase. The resulting sulfate conjugate is suggested to be the ultimate genotoxic electrophile. However, the results do not exclude the possiblity that NDELA itself undergoes sulfate conjugation.