Synthesis of prostaglandin H2 by prostaglandin H synthase (PHS) results in a two-electron oxidation of the enzyme. An active reduced enzyme is regenerated by reducing cofactors, which become oxidized. This report examines the mechanism by which PHS from ram seminal vesicle microsomes catalyzes the oxidation of the reducing cofactor N-acetylbenzidine (ABZ). During the conversion of 0.06 mM ABZ to its final end product, 4'-nitro-4- acetylaminobiphenyl, a new metabolite was observed when 1 mM ascorbic acid was present. Similar results were observed whether 0.2 mM arachidonic acid or 0.5 mM H2O2 was used as the substrate. This metabolite co-eluted with synthetic N'-hydroxy-N-acetylbenzidine (N'HA), but not with N-hydroxy-N- acetylbenzidine. The new metabolite was identified as N'HA by electrospray ionization/MS/MS. N'HA represented as much as 10% of the total radioactivity recovered by high pressure liquid chromatography. When N'HA was substituted for ABZ, PHS metabolized N'HA to 4'-nitro-4-acetylaminobiphenyl. Inhibitor studies demonstrated that metabolism was due to PHS, not cytochrome P-450. The lack of effect of 5,5-dimethyl-1-pyrroline N-oxide, mannitol, and superoxide dismutase suggests the lack of involvement of one-electron transfer reactions and suggests that hydroxyl radicals and superoxide are not sources of oxygen or oxidants. Oxygen uptake studies did not demonstrate a requirement for molecular oxygen. When [18O]H2O2 was used as the substrate, 18O enrichment was observed for 4'-nitro-4-acetylaminobiphenyl, but not for N'HA. A 97% enrichment was observed for one atom of 18O, and a 17 ± 7% enrichment was observed for two 18O atoms. The rapid exchange of 18O-N'HA with water was suggested to explain the lack of enrichment of N'HA and the low enrichment of two 18O atoms into 4'-nitro-4- acetylaminobiphenyl. Results demonstrate a peroxygenase oxidation of ABZ and N'HA by PHS and suggest a stepwise oxidation of ABZ to N'-hydroxy, 4'- nitroso, and 4'-nitro products.