The microsomal N-hydroxylation of the strongly basic guanidinium group (debrisoquine) to N-hydroxyguanidine (N-hydroxydebrisoquine) and the retroreduction of the N-hydroxyguanidine are demonstrated for the first time. The reduction of the N-hydroxyguanidine by liver homogenates and hepatocytes is catalysed by a microsomal NADH-dependent system that is strongly inhibited by hydroxylamine or N-methylhydroxylamine. In the presence of these alternate substrates for the reductase the microsomal catalysed N-hydroxylation of debrisoquine is readily characterized. The oxidation was inhibited by antibodies against NADPH cytochrome P450 reductase and the role of the P450 monooxygenase was further verified by studies with partially purified and purified P450 2C3 reconstituted systems. The transformation of N-hydroxydebrisoquine to the corresponding urea derivative was also detected in in vitro experiments with microsomal fractions and enriched P450 fractions as well as with flavin-containing monooxygenase (FMO). Experiments with catalase, superoxide dismutase and H2O2 have shown that the H2O2 or O2-, respectively, formed from the respective enzyme and the substrate, apparently participated in the reaction. Whereas the N-hydroxylation of the guanidine involves the usual monooxygenase activity of cytochrome P450 the resultant N-hydroxyguanidine decouples monooxygenases (cytochrome P450, FMO) and the H2O2 and, above all, O2- thus formed transform the N-hydroxyguanidine further to the corresponding urea derivative. The possibility for the N-hydroxylation of non-physiological guanidines to N-hydroxyguanidines and subsequent oxidative conversion to the respective urea is comparable to the physiological transformation of arginine to citrulline via N-hydroxyarginine with the liberation of nitric oxide (endothelial derived relaxing factor) and could, therefore, contribute to the efficacy of drugs containing guanidine and similar functional groups.