The NADPH-linked reductase activity of pig lung carbonyl reductase was activated two- to fivefold by fatty acids with a carbon chain length greater than nine at pH 7.0. cis-Unsaturated fatty acids of C:18 and C:20 were potent activators, showing Ka values of 2-14 microM which were lower than the values of 21-125 microM for saturated fatty acids (C:9 to C:16). Of the fatty acids arachidonic acid (C20:4) gave the highest activation. No significant stimulatory effect was observed with acyl CoAs, fatty alcohols, phospholipids, and nonionic detergents. Anionic detergents (sodium dodecyl sulfate and sarkosyl) stimulated the enzyme activity more than ninefold, but the Ka values for them were much higher than those for the cis-unsaturated fatty acids. Although no change in molecular weight or in subunit composition was observed in the enzyme activated by C20:4, the activation led to a decrease in thermal stability of the enzyme. The binding of C20:4 to the enzyme was instantaneous and reversible, shifted the pH optimum of the activity from 5.8 to 6.5, and changed the inhibitor sensitivity. In addition, C20:4 acted as an allosteric effector abolishing the negative interaction of the enzyme with carbonyl substrates which was seen without the fatty acid, but the activation increased both Vmax and [S]0.5 values for the substrates. Kinetic analysis with respect to NADPH concentration, in which no cooperativity was detected with or without C20:4, indicated that C20:4 was a nonessential activator of mixed type showing a binding constant of 10 microM. These results suggest that cis-unsaturated fatty acids may be potential modulators of pulmonary carbonyl reductase.