To examine the defect in side-chain oxidation during the formation of bile acids in cerebrotendinous xanthomatosis, we measured in vitro hepatic microsomal hydroxylations at C-12 and C-25 and mitochondrial hydroxylation at C-26 and related them to the pool size and synthesis rates of cholic acid and chenodeoxycholic acid as determined by the isotope dilution technique. Hepatic microsomes and mitochondria were prepared from seven subjects with cerebrotendinous xanthomatosis and five controls. Primary bile acid synthesis was markedly reduced in cerebrotendinous xanthomatosis as follows: cholic acid, 133 +/- 30 vs. 260 +/- 60 mg/d in controls; and chenodeoxycholic acid, 22 +/- 10 vs. 150 +/- 30 mg/d in controls. As postulated for chenodeoxycholic acid synthesis, mitochondrial 26-hydroxylation of 5 beta-cholestane-3 alpha, 7 alpha-diol was present in all specimens and was 30-fold more active than the corresponding microsomal 25-hydroxylation. However, mean mitochondrial 26-hydroxylation of 5 beta-cholestane-3 alpha,7 alpha-diol was less active in cerebrotendinous xanthomatosis than in controls: 59 +/- 17 compared with 126 +/- 21 pmol/mg protein per min. As for cholic acid synthesis, microsomal 25-hydroxylation of 5 beta-cholestane-3 alpha,7 alpha,12 alpha-triol was substantially higher in cerebrotendinous xanthomatosis and control preparations (620 +/- 103 and 515 +/- 64 pmol/mg protein per min, respectively) than the corresponding control mitochondrial 26-hydroxylation of the same substrate (165 +/- 25 pmol/mg protein per min). Moreover in cerebrotendinous xanthomatosis, mitochondrial 5 beta-cholestane-3 alpha,7 alpha,12 alpha-triol-26-hydroxylase activity was one-seventh as great as in controls. Hepatic microsomal 12 alpha-hydroxylation, which may be rate-controlling for the cholic acid pathway, was three times more active in cerebrotendinous xanthomatosis than in controls: 1,600 vs. 500 pmol/mg protein per min. These results demonstrate severely depressed primary bile acid synthesis in cerebrotendinous xanthomatosis with a reduction in chenodeoxycholic acid formation and pool size disproportionately greater than that for cholic acid. The deficiency of chenodeoxycholic acid can be accounted for by hyperactive microsomal 12 alpha-hydroxylation that diverts precursors into the cholic acid pathway combined with decreased side-chain oxidation (mitochondrial 26-hydroxylation). However, side-chain oxidation in cholic acid biosynthesis may be initiated via microsomal 25-hydroxylation of 5beta-cholestane-3alpha,7alpha,12alpha-triol was substantially lower in control and cerebrotendinous xanthomatosis liver. Thus, separate mechanisms may exist for the cleavage of the cholesterol side chain in cholic acid and chenodeoxycholic acid biosynthesis.