Aerobic incubation of 7-dehydrocholesterol with mouse liver microsomes in the presence of a detergent, an iron salt, and NADH or NADPH resulted in the conversion of the sterol to more polar products. In the presence of Fe(3+) or low levels of Fe(2+) the reaction was dependent upon reduced pyridine nucleotide and a microsomal enzyme system. At high levels of Fe(2+) or in the presence of Fe(2+) or Fe(3+) and ascorbic acid, nonenzymatic oxidation of 7-dehydrocholesterol occurred in the absence of NADH or NADPH. Chromatograms of products resulting from the enzyme-dependent and enzyme-independent reactions were similar. The enzymatic reaction was inhibited by certain chelating agents, by antioxidants, and by menadione, phenazine methosulfate, and ferricyanide. Low concentrations of EDTA stimulated the reaction and high concentrations inhibited it. In the complete system sterol oxidation was correlated with the peroxidation of microsomal lipids, but peroxidation of microsomal lipids proceeded more rapidly when either the sterol, the detergent, or both were omitted. Ergosterol was resistant to oxidation under conditions that caused extensive loss of 7-dehydrocholesterol. Microsomes from tissues other than liver were relatively inactive.