Rat hepatocyte homogenates convert 5-hydroperoxyeicosatetraenoic acid (5-HPETE) into biologically active leukotriene B4 (LTB4) as well as less active all-trans-LTB4 (i.e., 6-trans-LTB4 and 6-trans-12-epi-LTB4). Here, we present a hypothesis of the reaction mechanism and the minimal structural requirements of the active enzyme based on the following experimental evidence: The ED50 of the inhibitors 5,8,11,14-eicosatetraynoic acid (ETYA) and 5,6-dehydro-eicosatetraenoic acid was approximately 100-fold higher than for 5-lipoxygenase. Propanethiol and O2 were strong inhibitors of LTB4 formation, whereas butylated hydroxytoluene, nordihydroguaiaretic acid, metyrapone, Desferal and CO had no effect. Cytochrome c, catalase, hematin, and a Fe3+/Fe2+ couple, but not iron-free protoporphyrin IX, catalyzed the formation of only all-trans-LTB4. LTB4 formation in hepatocyte homogenates was heat- and trypsin-sensitive whereas all-trans-LTB4 formation was not. We propose that a ferric heme iron forms a ferryl-hydroxo complex upon homolytic scission of the oxygen-oxygen bond in 5-HPETE and the resulting 5,6-trans-epoxide radical is oxidized by the ferryl-hydroxo complex to yield LTA4. A mechanism for hydrolysis of LTA4 is described that results in formation of LTB4 (less than 1% yield) rather than all-trans-LTB4.