The finding that N-glycoloylneuraminic acid (Neu5Gc) in pig submandibular gland is synthesized by hydroxylation of the sugar nucleotide CMP-Neu5Ac [Shaw & Schauer (1988) Biol. Chem. Hoppe-Seyler 369, 477-486] prompted us to investigate further the biosynthesis of this sialic acid in mouse liver. Free [14C]Neu5Ac, CMP-[14C]Neu5Ac and [14C]Neu5Ac glycosidically bound by Gal alpha 2-3- and Gal alpha 2-6-GlcNAc beta 1-4 linkages to fetuin were employed as potential substrates in experiments with fractionated mouse liver homogenates. The only substrate to be hydroxylated was the CMP-Neu5Ac glycoside. The product of the reaction was identified by chemical and enzymic methods as CMP-Neu5Gc. All of the CMP-Neu5Ac hydroxylase activity was detected in the high-speed supernatant fraction. The hydroxylase required a reduced nicotinamide nucleotide [NAD(P)H] coenzyme and molecular oxygen for activity. Furthermore, the activity of this enzyme was enhanced by exogenously added Fe2+ or Fe3+ ions, all other metal salts tested having a negligible or inhibitory influence. This hydroxylase is therefore tentatively classified as a monooxygenase. The cofactor requirement and CMP-Neu5Ac substrate specificity are identical to those of the enzyme in high-speed supernatants of pig submandibular gland, suggesting that this is a common route of Neu5Gc biosynthesis. The relevance of these results to the regulation of Neu5Gc expression in sialoglycoconjugates is discussed.