A number of enzyme systems involved in the first steps of hexadecane oxidation can be induced by hexadecanol, an intermediate product of hexadecane degradation. It has also been found that, in Candida guilliermondii cells and in their mitochondrial fraction, an oxidase system is induced when the cells are grown on hexadecanol. This system is similar to that in cells grown on hexadecane; it oxidises higher alcohols at a high rate and is not inhibited by the inhibitors of the man phosphorylating respiration chain. The membrane-bound alcohol dehydrogenase and aldehyde dehydrogenase activities resistant to pyrazole, an inhibitor of cytosol ethanol dehydrogenase, are induced together with the oxidase activity when the cells are grown on hexadecanol as well as on hexadecane. The oxidation of higher alcohols by whole cells is entirely inhibited by azide although their oxidation by mitochondria is resistant to the action of azide; apparently, azide inhibits the transport of alcohols into the cell.