Oestradiol administration in castrated rats resulted in an increased activity of the cholesterol 7 alpha-hydroxylase and a decreased activity of the drug oxidase enzyme systems. 2. Aqueous solutions of oestradiol (up to 25.10(-6)M) incubated in vitro with microsomes, binds into the microsomal membrane framework reducing the activity of both enzyme systems. 3. The specific activity of cholesterol 7 alpha-hydroxylase, drops after 3 hr preincubation with oestradiol to at least 70% of its original value. 4. Actinomycin D and cycloheximide administration reduced the oestradiol-induced and control cholesterol 7 alpha-hydroxylase activity to the same level, 6 hr after the injections.