3-(4,5-Dimethylthiazol-2-yl)-2,5-diphenyltetrazolium bromide (MTT) reduction is one of the most frequently used methods for measuring cell proliferation and neural cytotoxicity. It is widely assumed that MTT is reduced by active mitochondria in living cells. By using isolated mitochondria from rat brain and B12 cells, we indeed found that malate, glutamate, and succinate support MTT reduction by isolated mitochondria. However, the data presented in this study do not support the exclusive role of mitochondria in MTT reduction by intact cells. Using a variety of approaches, we found that MTT reduction by B12 cells is confined to intracellular vesicles that later give rise to the needle-like MTT formazan at the cell surface. Some of these vesicles were identified as endosomes or lysosomes. In addition, MTT was found to be membrane impermeable. These and other results suggest that MTT is taken up by cells through endocytosis and that reduced MTT formazan accumulates in the endosomal/lysosomal compartment and is then transported to the cell surface through exocytosis.