The transformation of 2,3-oxidosqualene to lanosterol is catalyzed by a microsomal enzyme (cyclase) which can be obtained in soluble and partially purified form by treatment of liver microsomes with deoxycholate as previously shown. The catalytic and physical properties of the soluble enzyme are determined by ionic strength. In 0.4 M KCl the cyclase exists largely in a dissociated, enzymatically active form. Solutions of low ionic strength (0.1 M KCl or less) cause enzyme aggregation and loss of activity. The anionic detergent deoxycholate is essential for cyclase activity, but is effective only in a narrow concentration range.