Net sulfation of 4-methylumbelliferone in intact hepatocytes is regulated, in part, by substrate cycling between sulfotransferases (SULT) and arylsulfatases (ARS). Thus, ARS have the potential to influence rates of net sulfate conjugation of a variety of compounds in intact cells via interaction with SULT. Unlike ARSA and ARSB, which are lysosomal, steroid sulfate sulfatase (ARSC, also known as STS) is localized exclusively in the endoplasmic reticulum (ER). The present study was designed to assess the existence and extent of substrate cycling between steroids and their sulfate conjugates through ARSC and SULT, and also to initiate studies of the topology of the catalytic site of ARSC in the rat liver ER. Addition of rat liver microsomes to cytosol and 3'-phosphoadenosine 5'-phosphosulfate (PAPS) reduced rates of sulfation of dehydroepiandrosterone (DHEA) by SULT, and similarly hydrolysis of DHEA sulfate (DHEAS) was reduced when recombinant human hydroxysteroid SULT was added to rat liver microsomes in the presence of PAPS. There was no evidence for ARSC latency in the presence of detergent at either 4 or 37 degrees C, indicating that facilitated transport of steroid sulfates across the ER membrane may not be required for ARSC activity. The effect of proteases on ARSC activity in intact and disrupted microsomes was determined and compared with effects on components of the glucose-6-phosphatase system known to be localized on the lumenal and cytoplasmic surfaces of the ER. In contrast to the components of the glucose-6-phosphatase system, activity of ARSC in both intact and disrupted microsomes was substantially more resistant to protease inactivation. Our results indicate that substrate cycling of steroids and their sulfates does occur, and suggest that the active site of ARSC may be located within the ER membrane.