Feces from normal subjects and patients with cerebrotendinous xanthomatosis were incubated anaerobically with labeled chenodeoxycholic acid and ursodeoxycholine acid for known periods, and the bile acids formed were analyzed by TLC and scintillation counting. In the normal subjects, 80% of the chenodeoxycholic acid and 41% of the ursodeoxycholic acid were 7-dehydroxylated to lithocholic acid during 2 hr of incubation. In contrast, the fecal flora of the CTX patients transformed only 5% of chenodeoxycholic acid and less than 1% of ursodeoxycholic acid to lithocholic acid during the same time period. In several subjects (normals and CTX), the intestinal flora converted chenodeoxycholic acid to ursodeoxycholic acid without the accumulation of the hypothetical intermediate 7-ketolithocholic acid (3 alpha-hydroxy-7-keto-5 beta-cholanoic acid). These results indicate that the fecal bacterial flora is capable of 7-dehydroxylating chenodeoxycholic acid and ursodeoxycholic acid to yield lithocholic acid. Apparently the enzymes involved are relatively stereospecific since the 7 beta-hydroxy group of ursodeoxycholic acid was removed more slowly than the 7 alpha-hydroxy group of chenodeoxycholic acid.