It has been postulated that the peroxisomal fatty acid-oxidizing system [Lazarow & de Duve (1976) Proc. Natl. Acad. Sci. U.S.A. 73, 2043--2046; Lazarow (1978) J. Biol. Chem. 253, 1522--1528] resembles that of mitochondria, except for the first oxidative reaction. In this step, O2 would be directly reduced to H2O2 by an oxidase. Two specific procedures developed to detect the activity of the characteristic enzyme fatty acyl-CoA oxidase are presented, namely polarographic detection of palmitoyl-CoA-dependent cyanide-insensitive O2 consumption and palmitoyl-CoA-dependent H2O2 generation coupled to the peroxidation of methanol in an antimycin A-insensitive reaction. Fatty acyl-CoA oxidase activity is stimulated by FAD, which supports the flavoprotein nature postulated for this enzyme. Its activity increases 7-fold per g wet wt. of liver in rats treated with nafenopin, a hypolipidaemic drug. Subcellular fractionation of livers from normal and nafenopin-treated animals provides evidence for its peroxisomal localization. The stoicheiometry for palmitoyl-CoA-dependent O2 consumption, H2O2 generation and NAD+ reduction is 1 : 1 : 1. This suggests that fatty acyl-CoA oxidase is the rate-limiting enzyme of the peroxisomal fatty acid-oxidizing system.