Oxidation of side chain of 5 beta-cholestane-3 alpha,7 alpha,12 alpha-triol was studied in a patient with cerebrotendinous xanthomatosis (CTX) and in control subjects, using various subcellular fractions of liver homogenate and a method based on isotope dilution-mass spectrometry. In the control, 5 beta-cholestane-3 alpha,7 alpha,12 alpha-triol was converted into 5 beta-cholestane-3 alpha,7 alpha,12 alpha,26-tetrol and 3 alpha,7 alpha,12 alpha-trihydroxy-5 beta-cholestanoic acid by the mitochondrial fraction, and into 5 beta-cholestane-3 alpha,7 alpha,12 alpha,-25-tetrol by the microsomal fraction. In the CTX patient, liver mitochondria were completely devoid of 26-hydroxylase activity. The same mitochondrial fraction catalyzed 25-hydroxylation of vitamin D3. The microsomal fraction of liver of the subject with CTX contained more than 50-fold the normal amount of 5 beta-cholestane-3 alpha,7 alpha,12 alpha-triol. The basic metabolid defect in CTX appears to be a lack of the mitochondrial 26-hydroxylase. The excretion in the bile of 5 beta-cholestane-3 alpha,7 alpha,12 alpha,25-tetrol and 5 beta-cholestane-3 alpha,7 alpha,12 alpha,24 alpha,25-pentol observed in CTX patients may be secondary to the accumulation of the major substrate for the 26-hydroxylase, i. e., 5 beta-cholestane-3 alpha,7 alpha,12 alpha-triol, and exposure of this substrate to the normally less active microsomal 25-and 24-hydroxylases. It is concluded that the major pathway in the biosynthesis of cholic acid in human liver involves a mitochondrial C27-steroid 26-hydroxylation.