Modulation of cholesterol 7 alpha-hydroxylase activity was studied in a purified, reconstituted system from rat liver microsomes. Cysteine, dithiothreitol, reduced glutathione, and thioredoxin activated the system whereas glutathione disulfide inactivated it. A protein, which stimulated cholesterol 7 alpha-hydroxylase activity in the presence of glutathione or thioredoxin, was purified to apparent homogeneity from rat liver cytosol. It has a minimum Mr of 25,000. The protein had no effect on 12 alpha-hydroxylation of 7 alpha-hydroxy-4-cholesten-3-one or 25-hydroxylation of 5 beta-cholestane-3 alpha, 7 alpha, 12 alpha-triol. The cholesterol 7 alpha-hydroxylase stimulatory protein could not be replaced by the thioltransferase-dependent disulfide-reducing system nor by glutathione S-transferase A, B, or C. Neither ATP and MgCl2 nor sodium fluoride had any effect on the activity of the cholesterol 7 alpha-hydroxylase stimulatory protein. The results show that purified cholesterol 7 alpha-hydroxylase can be regulated by a mechanism involving disulfide bonds in the cytochrome P-450 molecule.