The ability of different lipid-binding proteins in liver cytosol to affect enzyme activities in bile-acid biosynthesis was studied in whole microsomes (microsomal fractions) and mitochondria and in purified enzyme systems. Sterol carrier protein2 stimulated the 7 alpha-hydroxylation of cholesterol and the 12 alpha-hydroxylation of 5 beta-cholestane-3 alpha, 7 alpha-diol in microsomes and the 26-hydroxylation of cholesterol in mitochondria 2-3-fold. It also stimulated the oxidation of 5-cholestene-3 beta, 7 alpha-diol into 7 alpha-hydroxy-4-cholesten-3-one in microsomes. The stimulatory effect of sterol carrier protein2 was much less with purified cholesterol 7 alpha- and 26-hydroxylase systems than with microsomes and mitochondria. No stimulatory effect of sterol carrier protein2 was observed with purified 12 alpha-hydroxylase and 3 beta-hydroxy-delta 5-C27-steroid oxidoreductase. Sterol carrier protein (fatty-acid-binding protein), 'DEAE-peak I protein' [Dempsey, McCoy, Baker, Dimitriadou-Vafiadou, Lorsbach & Howards (1981) J. Biol. Chem. 256, 1867-1873], ligandin (glutathione transferase B) and serum albumin had no marked stimulatory effects in either crude or in purified systems. The results suggest that sterol carrier protein2 facilitates the introduction of the less-polar substrates in bile-acid biosynthesis to the membrane-bound enzymes in crude systems in vitro. The broad substrate specificity appears, however, not to be consistent with a specific regulatory function for sterol carrier protein2 in bile-acid biosynthesis.