Mitochondria from the 7777 hepatoma incorporate substantial amounts of l-[U-(14)C]serine into phospholipid by a Ca(2+)-dependent base-exchange reaction. This reaction is virtually absent in normal liver mitochondria. The finding cannot be attributed to microsomal contamination of the sucrose gradient-purified 7777 hepatoma mitochondria. The reaction is also absent in the rapid-growth controls, fetal rat liver and regenerating rat liver. [(14)C]Serine incorporation into 7777 hepatoma mitochondrial phospholipid by base-exchange requires Ca(2+) and is inhibited by EDTA. Ca(2+) cannot be replaced by Mg(2+), Mn(2+), or Co(2+). The reaction is inhibited by a sulfhydryl reagent and by detergents and is abolished by heating to 70 degrees C for 10 min. Product analysis indicates that phosphatidylserine and its decarboxylation product, phosphatidylethanolamine, are formed by 7777 hepatoma mitochondria, while phosphatidylserine is the sole product with microsomes. The conversion of phosphatidylserine into phosphatidylethanolamine in 7777 hepatoma mitochondria is inhibited by KCN. This study provides further evidence of abnormal mitochondrial biogenesis in the 7777 hepatoma. Our earlier study indicated a greatly increased mitochondrial activity of CTP:phosphatidate cytidylyltransferase in the 7777 hepatoma (Hostetler, Zenner, and Morris. 1978. J. Lipid Res. 19: 553-560). The presence in mitochondria of these two enzymes, which are primarily microsomal in normal liver, does not appear to be due to rapid growth alone, since their intracellular distribution was not altered in fetal or regenerating rat liver.-Hostetler, K. Y., B. D. Zenner, and H. P. Morris. Phosphatidylserine biosynthesis in mitochondria from the Morris 7777 hepatoma.