Bile acids, such as taurocholate, have been shown to be transported into hepatocyte smooth endoplasmic reticulum (SER) vesicles. This process is Na(+)-independent, electrogenic, inhibitable by 4,4'-diisothiocyanostilbene-2,2'-disulfonic acid and taurochenodeoxycholate, with a Km of 352 microM and a Vmax of 29.6 nmol/mg protein/min. The observed transport is mediated by the bifunctional protein, microsomal epoxide hydrolase (mEH) which can also mediate bile acid transport into hepatocytes across the sinusoidal plasma membrane (von Dippe, P., Amoui, M., Alves, C., and Levy, D. (1993) Am. J. Physiol. 264, G528-G534). mEH was isolated from SER membranes by immunoprecipitation with monoclonal antibody (mAb) 25D-1 which recognizes this protein on the surface of intact hepatocytes. The SER-derived protein exhibited an apparent molecular weight, isoelectric point, N-terminal amino acid sequence, and mEH-specific activity that were indistinguishable from the plasma membrane form of the enzyme. Proteoliposome reconstitution of the SER taurocholate transport system indicated that mEH was absolutely required for the expression of transport capacity. The interaction of mAb 25D-1 with mEH on intact right-side-out SER vesicles demonstrated that the epitope found on the surface of hepatocytes was also found on the cytoplasmic surface of these vesicles (80%) and in the lumen (20%) suggesting the presence of two forms of this protein in the SER, the latter from being sorted to the cell surface. The existence of two orientations of this protein in the SER was confirmed by the sensitivity to tryptic digestion, where 75% of the mAb epitope was accessible to the enzyme. The loss of the 25D-1 epitope correlated with loss of taurocholate transport capacity. The role of mEH in the transport process and the orientation of the transporting isoform was further established by demonstrating that mAb 25A-3, which also reacts with mEH on the hepatocyte surface, was able to directly inhibit taurocholate transport in the SER vesicle system. These and previous results thus establish that isoforms of mEH can mediate taurocholate transport at the sinusoidal plasma membrane and in SER vesicles and that this bifunctional protein can exist in two orientations in the SER membrane. The association of bile acids with the SER suggests a possible role of intracellular vesicles in the transhepatocellular movement of bile acids from the sinusoidal to the canalicular compartment.