The Smith-Lemli-Opitz syndrome is a common birth defect syndrome characterized biochemically by low plasma cholesterol levels and high concentrations of the cholesterol precursor 7-dehydrocholesterol. The present study was undertaken to prove that the enzyme defect is at the step in which 7-dehydrocholesterol is converted into cholesterol and to establish a new biochemical method for the diagnosis of this disease. We assayed the latter part of the cholesterol biosynthetic pathway by incubating [3H]lathosterol (the immediate precursor of 7-dehydrocholesterol) with cultured skin fibroblasts from 15 homozygous patients, 14 obligate heterozygous parents, and 8 controls, and measuring its conversion to 7-dehydrocholesterol and cholesterol. The formation of cholesterol from lathosterol in parents was not significantly different from that in controls. In contrast, cells from patients made very little cholesterol (P < 0.0001, patients vs. parents or vs. controls) but readily converted lathosterol to 7-dehydrocholesterol. The defect was especially profound in a subgroup of 8 of the most severely clinically affected patients, as virtually no label was detected in the cholesterol fraction. These results provide compelling evidence that 1) this disease is caused by a primary defect in 7-dehydrocholesterol delta 7-reductase, an essential enzyme in the biosynthesis of cholesterol; 2) the most clinically severe form of the syndrome may be associated with the most inhibited enzyme; and 3) the enzyme lathosterol 5-desaturase that converts lathosterol to 7-dehydrocholesterol is fully intact. The present method using fibroblast and amniocyte cultures establishes it as a useful procedure for the biochemical diagnosis of this syndrome.